Running a business is never easy, especially when you’re sourcing products from another firm. There are several challenges you’re likely to face along the way. Some of these are associated with logistic regulations, cultural differences, currency fluctuation, and much more. For that reason, you need to be more vigilant to avoid committing some mistakes that could negatively impact your business.
Here are some strategies you can implement to avoid wholesale sourcing mistakes:
1. Know Your Supplier
Outsourcing without clearly understanding the seller is one of the biggest mistakes many businesses make. For that reason, you need to research to learn more about your supplier.
Though the internet is full of suppliers, not all of them are genuine. It’s essential to ensure you work with a reputable supplier. One of the best ways to know about a supplier’s reputation is by reading other customers’ reviews and feedback. You can either decide to source your products directly from the manufacturer or a distributor.
However, suppose you’re not willing to source your products from the manufacturer or the distributor. In that case, you can buy your products from other e-commerce businesses through sites like Tactical Arbitrage and other similar firms. Such sites allow you to compare prices from different firms before making a purchase decision.
2. Consider The Market Demand
Demand is an important factor to consider when sourcing your business products. This is because you may not want to stock your shop with slow-moving items that can end up holding up your capital.
Demand is the quantity of goods consumers are willing and able to purchase at a particular time and price. Therefore, you need to measure the demand for the product you’re planning to source, then make an order. Analysing the market demand ensures you don’t understock or overstock your business.
3. Analyse The Market Competition
After analysing the market demand, it’d also be a good idea to consider your competition. Analysing the competition can allow you to employ the best practices when sourcing your products so you can stay ahead of the competition.
When the demand for a product is high, it means the competition is also stiff. Market competition can lead to price wars between firms providing similar products.
Selling a product at a lower price is one of the strategies most businesses use to fight market competition. However, if you’re not careful, selling your products at a lower price than the market price can ruin your business. So, before you source your products, it’d be a good idea to analyse to see whether you can beat the competition or not. If you can’t, consider sourcing products with less competition.
4. Track The Levels Of Your Inventory
Not monitoring and tracking inventory are another mistake most businesses make. For that reason, you need to have a system in place to help you know your inventory levels. Maintaining an accurate record of your inventory levels can allow you to respond to the demand quickly. It also allows you to know what products to source more, so you can generate more sales.
The best starting point to inventory management is to install inventory management software in your business system. This software will allow you to monitor the levels of your stock and will also notify you when you’re running out of stock.
5. Insure Your Products
The future is always uncertain, and anything might happen to your products before reaching you. So, when your goods are in transit, you can insure them against uncertain circumstances like theft or damage. Insurance makes sure you’re compensated for your lost or damaged items.
There are several insurances you can choose from. Some of these cover the land, air, or water transportation damages. So, do your due diligence and find an insurance company that suits your business needs.
6. Request A Sample Product
Failure to request a sample is another big mistake committed by businesses when sourcing products wholesale. So, if you’re going to source your business items in bulk, it’d be paramount first to request a sample for assessment.
Some of the things you’re going to check in your sample item include colour, weight, dimensions, functions, features, and much more. Therefore, to ensure you source the correct items, be sure to request a sample product before allowing your supplier to produce large quantities.
In most cases, sourcing wholesale products can be a stressful and overwhelming task. It involves many procedures and steps to follow, and if you’re not careful, you might end up making several mistakes. However, with the correct information, you can make sourcing a hassle-free process. So, to avoid costly mistakes when sourcing for your products, implement one or all of the above-explained strategies.