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Developing a Sourcing Strategy
Sourcing & Market Research
When developing a sourcing strategy, there are a number of questions you should answer from sourcing timeframes to shipping to geographical factors.
These questions, often times, have a variety of answers and it’s how you answer that will shape the right sourcing strategy for the long-term growth of your business.
HOW OFTEN DO YOU SOURCE? In the competitive world of retail, it’s imperative not to stay idle selling the same products time and time again. Always keep sourcing new products or product lines and change up your inventory.
“The time to think about getting new lines of stock is when your sales are riding high and everything’s going well. It’s a big mistake to wait until things are a bit sluggish and then start to find your next best seller.”
Dan Wilson, Editor, Tamebay.com
Picture this: you’re in a store admiring a product – whether it’s an article of clothing, a lighting fixture, or a piece of furniture. You may be taking a picture or calling a friend or spouse to look at it, drawing more attention to the product. When you walk away, others will gravitate to the product you were vesting a lot of interest. This happens all the time.
So, using this same logic, but within an online marketplace, other sellers can see what you’re doing, how you’re doing it and replicate to create more competition. Rather than see a crash in your fulfillment of orders, change up your product offerings and keep your business climbing the revenue ladder.
HOW DO YOU KNOW WHAT TO SOURCE? When first starting a business, you could get carried away with all your buying options. At first, you’ll gravitate towards products that interest you – and while this is a valid approach, you also need to make sure there is a market demand for the product.
Often times seeing a great product at a great price doesn’t mean it will sell. It may be a product you’re interested in but know some (or most) may not be interested. Thus, you’ll be left with an abundance of great product…not selling. Analyze previous year sales, and if that’s not available conduct some market research to see the products your local target market needs.
“First, use Terapeak to analyze past sales – is there any demand? Next buy a small quantity and see if it sells, the proof is in the pudding. Don’t think something won’t sell because everyone has it – we do really well on things which can be bought in the big supermarkets. Lastly, be upfront about restrictions. Some suppliers don’t like eBay, Amazon or international sellers.”
Trevor Ginn, Managing Director, Hello Baby
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