Sourcing products to sell for your retail store

Sourcing products is an essential process for every retail business, whether it is for instore stock, or ecommerce sales.

Many years ago, merchants would travel abroad to find the right products for their business. Today, retailers can choose from a vast range of products, all from the comfort of their own home.

But with so much choice and most sourcing being done remotely, your approach and preparation can make or break a business.

If you want to source profitable products for your retail business, you’ve come to the right place. This guide will explore the best ways to source products, giving simple, actionable steps to transform the way that you choose your stock.

What is product sourcing?

Product sourcing is the process of finding products to sell. It involves understanding which items to sell, finding reputable suppliers to purchase from and setting up agreements that meet your stock requirements.

How to source products to sell in 13 steps

Product sourcing can be straightforward when you know what is required. If you’re wondering how to source products for your store, we’ve broken it down into 13 actionable steps.

Follow these 13 simple steps to design your own successful product sourcing strategy.

1. Understand your market 

The first step is to understand your target market and their interests. Use existing sales data, market research, social media listening and any studies that you can find to work out which category of product could sell best to your intended audience.

2. Find inspiration online

Look around online to find inspiration for popular products, making sure these product ideas align with your target market. Use your research to work out which trending products are likely to sell best, based on inspiration that you find and competitors’ product ranges.

3. Narrow down your search

Finetune the types of products that you are looking to source by asking key questions which could impact your ability to sell each item:

• Is it shippable? An ideal item will be small, light and not breakable.
• Is it sourceable? The products that you have in mind must be available to purchase in the quantities that you need without having stock supply issues. Consider looking at different sourcing methods to check. View the section in this article on ‘How to find suppliers’ to see the various options available.
• Is it seasonal? Think about whether a product is likely to have year-round sales, or whether it makes sense for you to have seasonal stock.

4. Understand your product’s potential

Check your criteria to make sure your shortlisted products are likely to sell. As well as using your own sales data, carry out research online, using other sources such as Amazon sales history and social media content.

5. Calculate your profit margin

Before placing an order, it is essential to know how profitable a potential product will be. Key considerations include costs to purchase, import, receive and ship to customers, as well as warehousing, storage, picking, packing, handling and any other fees such as FBA charges.

6. Understand the demand

Once you have a product in mind, it’s time to look at the demand for these items in more detail. Look at key competitors to see which of their products sell best. Google is a great place to search for similar products that sell well. Then, you need to identify the ways that you can capture your target consumers’ interest with these products and stand out from your competitors.

7. Finalise your product choice

Based on your research, you should finalise the product that you would like to stock. This should include the quantity, type of product and specifications such as colour, size etc.

8. Contact potential suppliers

This stage involves finding out all of the information that you need to know about your preferred suppliers. This is the best time to ask any questions or raise any concerns, to avoid committing to a supplier that cannot fulfil your requirements.

Supplier outreach template

When reaching out to suppliers, it’s important to keep communication as simple and straightforward as possible. You should send a friendly, but professional email that requests all of the information that you need to know to make a decision.

Here’s an example of a supplier outreach email:

Hi ____,

My name is ____ from ____. I am looking to purchase drinks bottles for the UK market. See attached photos. We intend to sell these products both instore and online. We estimate that the annual purchase volume will be up to 10,000 pcs annually after a trial order of 300 and an evaluation of samples.

Specifications:

• Size – 800ml bottle
• Colour – Should be clear and transparent 
• Material – Plastic, recyclable ideally
• Must be dishwasher safe

Are you able to manufacture this type of plastic drinks bottle? If so, please could you provide the following:

• Photos of products
• Product specification
• EXW quotation
• Minimum order quantity 
• Lead times
• Can we personalise or add logos to these bottles? If so, where?
• Cost for samples and delivery time to the UK

9. Ask for samples

The best way to ensure you’re happy with stock and test quality is to request samples. As well as being able to touch, inspect and see the product in person, you will also be able to assess the delivery experience, which is essential if you are considering dropshipping. This enables you to see how the supplier handles transactions, making sure it is done professionally. You can also show the products to others, getting feedback to make sure they are suitable before committing to ordering large quantities.

10. Do a trial run

Once you know you like a specific supplier’s products, it is time to do a trial run with your preferred supplier or manufacturer. Most retailers choose to order a smaller number of units, so they can run a test online or in specific stores. By doing this, you can understand sales figures and consumer feedback before placing large-scale orders.

11. Evaluate supplier

Following the trial run, it’s the perfect time to look at the overall experience to make sure they meet your standards. Questions to ask include:

• Did the product meet expectations?
• Did it overperform or underperform?
• What was the feedback like?
• Did the delivery arrive on time?
• Was customer service good?
• Were the products packaged properly to protect them?
• Was the cost competitive?

12. Give honest feedback

Having open communication with suppliers is essential to make the agreement work for both parties. If there are any issues that need resolving, let the supplier or manufacturer know and see if a resolution can be found. Being honest will help collaboration for the best possible product sourcing experience.

13. Determine your long-term supplier and keep a shortlist

Even once you have decided which supplier you wish to work with long-term, it’s important to keep a list of those that could also meet your requirements. This shortlist is key to making sure you are not reliant on one single supplier, as they could increase prices, reduce product quality, or could have a supply issue. By having a list of backup suppliers, you are able to pivot as required to make sure customer expectations and quality standards are met.

How to find suppliers

With the vast amount of products available to purchase online, it’s important to stay on track with your research when looking to find suppliers.

To keep your product sourcing as productive as possible, consider these five popular types of product sourcing.

Manufacturers and wholesalers

Sourcing products from manufacturers or wholesalers involves having a third party provide stock for your business. This is the most common approach for businesses that know which products they want to source and are looking to replenish them on a regular basis.

Benefits of manufacturers and wholesalers

• Ability to scale up and down as required
• Dealing with experienced manufacturers and wholesalers
• Assistance with supply and production
• Access to a wide range of products

Disadvantages of manufacturers and wholesalers

• Requires significant initial investment
• Takes time to set up agreements
• There is typically a minimum order quantity (MOQ)

Handmade or DIY products

Many retailers choose to stock handmade or DIY products. This approach is often used by independent retailers that wish to stock unique products, or those with customers that enjoy getting creative.

Benefits of handmade products or DIY products

• Unique items that competitors do not stock
• More control over product quality
• Ability to pivot to stock new products quickly

Disadvantages of handmade products or DIY products

• More time-consuming to source suppliers
• Increased pressure to source components of products
• Can be challenging to scale

Dropshipping

Dropshipping means another vendor fulfils orders on a retailer’s behalf, taking care of everything after the sale including packaging and shipping.

Benefits of dropshipping

• Lower startup costs
• Ability to test new stock with less risk
• More product variety
• Less time required to fulfil orders
• Quick to get started

Disadvantages of dropshipping

• Reputation relies on a third party
• Customer service must be organised to be effective
• Communication between retailers, dropshippers and customers must be efficient
• Lower profit margins

Learn more about dropshipping in our ultimate guide.

Trade shows

Trade shows connect suppliers and distributors with those looking to buy products. This great way of sourcing products allows retailers to meet suppliers face-to-face.

Benefits of trade shows

• Access to a wide range of suppliers in one place
• Ability to negotiate with a supplier, manufacturer, or distributors
• Seeing and feeling products in person
• Building rapport and trust with a potential supplier or manufacturer

Disadvantages of trade shows

• Often costs to attend and travel to trade shows
• Can be overwhelming without a plan
• Some suppliers or manufacturers have a minimum order quantity (MOQ)

Marketplaces

Marketplaces allow retailers to source products from anywhere in the world, as well as locally. This creates opportunities for sourcing products in ways that meet each retailer’s preferences.

Benefits of marketplaces

• Access to products from around the world
• Simplified ordering processes
• Ability to source one of a kind, unique items, or those from a niche market

Disadvantages of marketplaces

• Higher prices than wholesale
• Limited stock availability
• Stock replenishment can be time-consuming

Click here to see the 10 best marketplaces for UK retailers.

How to be a good buyer

Whether you have an ecommerce business and are looking for stock to sell online, or you have a physical store and want to get inspired to begin selling new products, it’s important to start building rapport with every potential manufacturer or supplier.

The goal is to work with companies that can provide the products that you need and that you can trust with shipping, while maintaining a low cost.

It is a good idea to build professional relationships with manufacturers and suppliers, as this will ultimately benefit potential buyers, as well as every customer.

Top tips include:

• Understanding your customers and target market
• Having a clear vision for what you want to sell
• Knowing how you want to ship the product
• Having an idea of ideal lead times and the shipping process
• Being reliable
• Communicating your ideas clearly

To read our free digital guide on how to be a good buyer, click here.

Best products to sell online

The rise of the online store has made it popular for a small business or brand to begin selling online. The COVID-19 pandemic saw an increase in the number of people selling online, as stores were closed and people took to the internet to sell online and make money to generate more income.

Customers have become accustomed to buying from an online store, meaning those that launched an online business for ecommerce purposes now have access to a larger audience of potential customers. This shift in consumer behaviour has meant that to keep up with customer demand, many retailers need to create an online presence, gaining access to new, niche product ideas to help them make sales.

Whether you have a physical store or an online store, building customer loyalty and creating an exciting brand still relies on knowing which items you should be selling online.

There are many ways to find the best products to sell online for an ecommerce business, which this article will now explore in more detail.

Social media

Social media is a great place to research popular products for selling online. This is a fantastic method of understanding the preferences of your customers, as well as the factors that encourage them to make a purchase. The good news is that this is completely free to do, meaning it’s possible for any small business to benefit from.

If you are looking to come up with products that will sell online, you could create a list of competitors and then view every customer comment, taking note of those that are popular. Often referred to as social listening, this process makes it easy to take a look at the feedback that other businesses and companies receive, helping you to work out whether or not it is a good idea to choose something as a product to sell online.

Online marketplaces

Online marketplaces are a great way to view trending products that you could benefit from selling online. One of the main benefits of online marketplaces is that it gives you access to a wide range of businesses on one platform. For small businesses that are ready to start looking for inspiration but don’t have the resources to attend countless events, this can be a great way to compare suppliers that sell a specific type of item.

Online marketplaces can work for research purposes, as well as making it possible to purchase and start selling a wide range of products. For a small business, it could be a good idea to begin by looking at a specific type of product for a business idea. For those looking to sell a wide range of products, online marketplaces give access to new suppliers, niche, one of a kind products and much more. These resources can work to give product inspiration for businesses of all sizes for free, without even needing to become a member.

Marketing content

Almost every company will invest the most money and resources into marketing the product that sells best. Begin by finding an online business that has similar customers to those that you aim to target. View the marketing content that similar businesses invest in. Looking at the marketing efforts of industry leaders can be a great way to identify a best-selling product.

Start building a list of the types of product that your main competitors are selling, making sure that they would be a good fit for your audience or target customer.

Competitor analysis

Carrying out competitor analysis helps to highlight any online trends that you are currently not making the most of. As well as on social media, competitor analysis can be conducted in a number of ways, revealing items that you can sell online.

• Looking at the online store of a competitor’s brand
• Using sales and market data
• Analysing a competitor’s website

Product sourcing advice from retailers

What better way to understand product sourcing than to learn from others’ experiences? We spoke with a range of retail businesses and got their top tips and advice on product sourcing.

Find suppliers that share your values

“I think it’s vital for retailers to work collaboratively with other businesses who share their passion and values. If you are aligned in your thinking, it will give strength and purpose to any partnership. There are opportunities to create much more productive partnerships founded on shared values which enable greater contribution, not only to the bottom line, but also to the environment and local community.” – Cosy Cottage Soap

Read more about Cosy Cottage Soap’s approach to retail sourcing here.

Create an agile business model for sourcing products

“We have built up quite an extensive range of UK-based and European-based suppliers, so we’re always on the hunt for new suppliers. Now we’ve got to a certain size where we’re more established, we’re trying to work more with brands directly. We’re in a better position to say how much we’re selling and asking to work directly with them, rather than a third-party supplier. We take advice from our suppliers, do research and buy low volumes at the start for new or niche products, unless we know it’s one that sells in large volumes.” – Perfume Direct

Read more about Perfume Direct’s approach to product sourcing here.

Consider ethics when sourcing products

“Some of our products are 100% vegan and the bags directly provide business support, protecting from exploitation, giving good wages and the ability to succeed to thousands of workers through fair trade and operative working in Kolkata, India. We source from ethical places and manufacture in the right way. Accreditations are really important, so we make sure the facilities we use have the relevant ones, and we know exactly what these actually mean to workers. We make sure the facilities we use promote good health and safety, have great management, fair hours policies and a suitable management structure.” – Cora + Spink

Read more about the ways that Cora + Spink ethically source their bags.

Build rapport with your suppliers when sourcing products

“Our coffee is single origin, which is not common. At first, we didn’t buy enough to get a decent price as it is quite expensive in comparison to most coffee. What we pay at wholesale is higher than the retail price of coffee in a supermarket, so we began by pretty much making no profit on what we did, with the hope that we could grow in size. Some of the coffee shops that roast their own saw us as competitors as they also did coffee subscriptions, so they didn’t want to supply us. But some understand and are supportive because when we put it in our bags, our labels have all of their information – we talk about the roasters and the coffee on our packaging to publicise them.” – Blue Coffee Box

Read more about Blue Coffee Box’s approach to building relationships with suppliers.

Share your products’ sourcing journeys

We enable customers to see and learn about their products’ journey from sourcing to gifting. Sharing the story of each product and where it comes from has increased footfall and online sales.” – Ironbridge Candle Company

Read more about how Ironbridge Candle Company proudly show off each product’s journey.

Product sourcing summary

This article has outlined the best ways to source products for any online ecommerce store, physical shop, or brand. By following the simple steps in the guide and implementing the ideas that you think are the best fit for your target audience, you can make the sourcing process both simple and enjoyable.

Product sourcing FAQs

How to find trending products when product sourcing

This article lists different ways that retailers can find trending products for free. By utilising digital channels and researching every potential product in detail, it can be simple to find the right product for any audience.

How to know which products to sell

Whether you are an online business or an instore retailer, knowing which stock to sell is essential in building and maintaining customer loyalty and sales. The right products for your company are those that appeal to your target market. By looking at popular ecommerce products and seeing the most common items promoted in digital marketing materials, this can be a great way to find a custom product that could be a good fit for your audience. This article lists 13 simple steps to help you find products that every customer will want to add into their shopping cart.

Where can I source products?

There are various methods of sourcing products, both online and in person. Whether you are looking to source a home decor product, digital products, niche items, or even subscription boxes for your store, you can find the perfect products for your brand to sell to potential customers. The process of sourcing products should be custom-built to every audience, making sure the product that you have in mind is right for your brand.

When you are ready to start sourcing a product, the process should begin with research in a wide range of places, which is why it is recommended that you take a look at as many different manufacturers and suppliers of each suitable product.

How to choose what to sell on your ecommerce website?

The best way to identify the right items to sell on your online store or company is to carry out in-depth research and create a plan to reach your target market. Speak with your target audience and look at competitors’ marketing to find inspiration. The steps in this article will help you to make sure that a product is the right fit before making a significant financial investment. By doing this, you can do a trial run of a product on your website and ensure they are a good fit for your audience.

What kind of products can you sell online?

You can sell every type of product online, whether they are commonly found items, or a niche product. Create a list of products that your audience will like, uploading each chosen product on your ecommerce website and marketing them to grow reach for your company.

How can I start selling online?

Once you have decided on the types of products that you wish to sell for your brand, it is time to create an ecommerce store for your company. Creating an online presence gives you global reach, helping you to grow your brand and make sales via an online store.

Click here to read our article on how to set up an online store on a budget.

Should I sell different products online and in my physical store?

Not necessarily. Regardless of the platform, you should stock items that sell well. This means that if you find you have the same customers visiting your ecommerce store as you have in your physical business, the same products could be sold.

However, for shipping purposes, those that are sold online may be slightly different. For example, selling lighter, smaller items on an online store can help to reduce the cost of shipping, as it will be cheaper to create packaging and send them out to customers. For example, a home decor brand or company might sell large items of furniture instore to potential customers, giving free local shipping. However, if their company has ecommerce customers from around the world visit their online store, they would not be able to offer free shipping.