The complete guide to product sourcing in 2024

As the tides of ecommerce keep changing, efficient product sourcing becomes imperative. Whether you're a startup whiz or a seasoned pro looking to up your game, we've got the lowdown on making your supply chain smoother, smarter, and more sustainable.

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• Understand the evolving landscape of product sourcing in 2024, with a focus on innovative strategies tailored for ecommerce businesses and international entities.

• Learn the importance of sustainability, quality control, and building strong supplier relationships in current global sourcing practices.

• Discover the value proposition of Gelato's print on demand network as an efficient sourcing solution - designed to streamline your supply chain and reduce costs, irrespective of your geographical location.

• Gain actionable insights on various sourcing strategies - from Print on Demand, Dropshipping, and Wholesaling to Manufacturing - that can diversify your product offerings without the complexity of traditional sourcing methods.

• Learn essential sourcing tips to make your online store successful and competitive, from conducting market research, aligning supply with demand, and thorough supplier evaluation, to appreciating the quality and reliability of samples and the potential benefits of working with multiple suppliers.

Product sourcing is the process businesses use to find and acquire the goods or materials they need to create their products or to sell them directly to customers. It involves researching, negotiating, and partnering with reliable suppliers or manufacturers to secure quality items at the best prices.

Let's dive into the world of product sourcing strategies designed for ecommerce, covering various approaches from print on demand to wholesaling, each uniquely poised to maximize your store's success in 2024.

1. Print on demand

Unlike traditional inventories, print on demand allows businesses to create products only after customers have made a purchase, effectively eliminating overproduction and cutting down on waste. It's economical, reducing the need for physical storage space and making it easier to test new product ideas.

The real beauty of print on demand lies in its easy integration with platforms like Gelato, which can print and ship your items closer to customers, slashing lead times and shipping costs. It's a versatile method for diversifying offerings without the complexities of traditional sourcing.

2. Dropshipping

Dropshipping is another stellar product sourcing strategy that has gained popularity among ecommerce businesses. This model involves you, the retail business, partnering with dropshipping suppliers who will fulfill orders and send products directly to your customers.

With this approach, there's no need to keep an inventory, as your dropshipping supplier takes care of everything from packaging to fulfillment. This significantly reduces operational costs, letting businesses focus more on marketing and customer service.

However, due to its ease of use and low-cost start-up, it could mean steeper competition. So, for success in 2024, consider selecting niche products aligned with customer interests and request samples from your supplier before finalizing your offerings.

To further enhance your dropshipping strategy and ensure product quality meets your standards, it's advisable to explore marketplaces that connect suppliers with buyers.

3. Wholesaling

Wholesaling is the process of buying products in bulk from manufacturers, typically at low costs, and selling them to retailers. This mode of sourcing allows ecommerce establishments to both cut costs and meet high-volume demand.

While it requires significant upfront investment and storage solutions, it can minimize unit costs, affording the opportunity to optimize profit margins. This method demands thoughtful forecasting and stock management to avoid overstock situations.

4. Manufacturing

For ecommerce giants, manufacturing offers an avenue to create bespoke and high-quality products that reflect their brand identity. However, in 2024, an emphasis on sustainability is essential. Many businesses take a holistic approach, integrating their manufacturing data with sustainability and sourcing information to balance cost, sustainability, and manufacturability.

For ecommerce sellers looking to make a positive impact, it's not just about what they sell but how it's made. By rethinking and improving their processes and even building eco-friendly facilities, sellers can step up to more sustainable manufacturing practices. 

This is especially true for apparel industries, where choosing green raw materials can significantly reduce emissions.

Let's dive into actionable strategies that can elevate your ecommerce game and redefine your sourcing strategy in 2024.

1. Conduct market research

You might have an innovative product idea, but it won't take you far if there's no demand for it. Conducting market research is one of the necessary product sourcing tips you can't afford to ignore. It gives you information about customer preferences and habits, helping you make informed decisions. 

Here's how to do it.

• Identify your target audience: Pinpoint who your ideal customers are. Do they fall within a certain age group? What are their buying habits? What challenges do they face that your product can solve? Understanding your audience will help ensure that the products you source are not only of interest but also meet their needs and wants.

• Research your competitors: What products are they offering? At what price are they selling them? What is their customer service like? Gaining insights into competitors' activities can help you identify gaps in the market, find unique selling points, and position your products in a way that will make them stand out in the industry.

• Stay current with market trends: Regularly monitoring the industry trends can help you identify products that are growing in popularity before your competition does. Utilize resources such as Google Trends, social media, and trade shows to stay updated on market changes.

• Analyze market data: Market research data, whether from your own metrics, industry reports, or third-party research, will provide you with essential insights. Be sure to track changes over time to identify emerging patterns and trends and inform your product sourcing decisions.

2. Align offerings with customer demand

Your success as an ecommerce business hinges largely on how well you align your product offerings with customer demand. This means understanding your customers’ needs and ensuring that you supply products that meet these needs. Here are some ways you can better align your offerings with what your customers want. 

• Utilize big data: Embrace big data for predictive analytics to bridge the gap between forecasted and actual demand. This will promote leaner inventories and minimize waste from unsold products.

• Embrace local sourcing: Public demand for locally sourced items is rising. Companies that can source goods locally not only meet consumer trends but also enhance their corporate social responsibility (CSR).

• Customer feedback: Utilize customer feedback to understand their needs better. Feedback can often provide invaluable insights into what customers want and how you can improve your offerings.

• Product diversification: Consider offering a variety of products to cater to a wider audience and scale with market trends. Gelato's print on demand network can be a great tool for diversifying without the complexities of traditional sourcing.

Keep in mind that customer demands change over time. Always be aware of evolving trends and be flexible enough to change your product lineup as needed. Your ultimate goal should be to create a product sourcing strategy that is sustainable and malleable enough to adjust to the market.

3. Evaluate suppliers thoroughly

Suppliers aren't just vendors who provide you with product components or finished goods but rather vital parts of your business journey. 

As a savvy ecommerce player of 2024, it's incumbent upon you to evaluate your suppliers thoroughly. 

But how exactly? Let's dive right into it. 

• Experience and background: Begin with your potential suppliers' history. Have they worked with businesses similar to yours? What's their track record? Are they reputable and reliable, and do they come recommended?

• Sustainability practices: With sustainability gaining immense traction, it's crucial to evaluate your supplier's Environmental, Social, and Governance (ESG) practices. It's not just about being green; it's about ensuring a brighter future for your business and the world around you. Ask your suppliers: Do they have a code of conduct? Do they adhere to sustainability standards? Do they track and report their sustainability performance?

• Quality assurance: Always take a comprehensive view of your supplier's product quality. This means focusing not just on the final product but also on the components and processes. Does your supplier have rigorous quality control protocols in place? Do they conduct regular product and process audits?

• Commitment to delivery: In the world of ecommerce, timely delivery isn't a bonus—it's a necessity. Assess your supplier's delivery timelines, ability to meet order deadlines, and handling of unforeseen delays.

• Financial stability: The financial health of your suppliers is a key factor that directly impacts your own business. Carry out a financial background check to ensure they are robust enough to weather unexpected challenges without impacting your supply chain.

4. Order samples to gauge product quality

Ensuring product quality in your ecommerce business is key, and one effective way to do this is by ordering samples from your suppliers. This technique is your firsthand quality check before aligning with any particular supplier. 

Let's see why it is crucial and how best to leverage it. 

1. Verify product quality: The quality of the sample gives you a clear and tangible insight into what your customers will receive. It reflects the supplier's production standards and commitment to quality.

2. Assess packaging standards: Apart from the product itself, the quality and durability of the packaging have a significant role in ecommerce. By ordering a sample, you get to assess the standard of packaging, ensuring that it withstands shipping without any damage.

3. Test supplier reliability: A supplier's ability to fulfill a sample order promptly and accurately speaks volumes about their reliability. It's a good indicator of their professionalism and capability to meet deadlines.

4. Establish direct communication: Requesting a sample provides an opportunity to interact directly with the supplier. This interaction can reveal a lot about their customer support and their willingness to accommodate your business needs.

5. Informed decision-making: Having a sample in hand gives you a concrete basis for comparing different suppliers. It facilitates informed decision-making, ultimately helping you source a product that aligns with your brand's standards and customer expectations.

Stay mindful that a good-quality sample doesn't always guarantee flawless batch production. Hence, always have robust quality control measures in place, ensure regular inspection of products, and maintain clear communication with your suppliers about your quality expectations.

5. Consider working with multiple suppliers

The option of collaborating with multiple suppliers is a strategy you should seriously consider in your ecommerce venture. This approach can offer you a host of benefits. But, like any business strategy, it comes with its share of challenges. Let's examine both sides of the coin in the discussion that follows.

Here are a few factors you should consider when taking the multiple-supplier route:

• Reduced dependence: When you work with multiple suppliers, you're not putting all your eggs in one basket. This reduces the significant disruption that might arise if a single supplier fails to deliver.

• Greater negotiation power: Working with multiple suppliers could give you more bargaining clout. You can leverage the competition between your suppliers to negotiate better rates and terms.

• Flexibility and diversification: Multiple suppliers mean a more extensive range of products. This could aid in diversifying your offerings. Plus, it allows you to shift between suppliers to fulfill your store's ever-changing product demands.

• Ensuring continuity: If a supplier unexpectedly falls through, having others in the pipeline ensures business continuity. By hedging your bets, you're shielding your business from unexpected shocks.

However, navigate this strategic path with care. Some potential pitfalls to watch out for include: 

• Increased management effort: More suppliers translate to more relationships to manage. This could lead to increased overhead concerning time and administrative efforts.

• Quality inconsistency: Different suppliers might deliver varying levels of product quality, which could impact customer satisfaction.

• Confusing branding: If your product selection is too diverse, it might confuse your customers and dilute your overall brand image.

Choosing Gelato as your product-sourcing solution is a game-changer. Offering a multitude of print on demand products, including t-shirts, mugs, wall art, phone cases, and photo books, Gelato is a one-stop shop for meeting your diverse product needs.

Reducing lead times and shipping costs and inheriting quality control benefits allows you to focus on what truly matters—growing your online store. The best part is that it's perfectly suited for businesses of all sizes.

So, why wait? Sign up for Gelato today and choose a subscription plan that aligns with your growth goals and business objectives.