Product Sourcing: A 2022 Guide to for Small Businesses

While there are plenty of things that have to work together in harmony for a business to achieve lasting success, one has a particular power to make or break your small business: product sourcing. After all, where your inventory comes from and how much you pay for it can directly impact the bottom line for your business. 

Whether you’re just getting started with an eCommerce store or you’re looking for new and exciting ways to refresh the lineup of products that you offer, this guide to product sourcing will break down everything you need to know to take your business to the next level!

What is Product Sourcing?

While it may sound like a complex term, product sourcing simply refers to the process that you use to procure the items that your business sells. This process will vary from one business to the next, but the premise is always the same: seeking out reliable manufacturers and suppliers to attain the highest quality products at the lowest price. 

Types of Product Sourcing

If you’ve done any research online, you might have noticed that there’s no shortage of places to source your inventory. In fact, sometimes, there are so many options that it can quickly become overwhelming.

When you break all of these sources into basic categories, things become much more manageable. Here are the main types of product sourcing that you’ll want to explore:

Dropshipping Sources

For eCommerce businesses, dropshipping is one of the best options out there. This model lets you sell products from hand-picked manufacturers on your website — all without ever having to deal with physical possession of the inventory. 

The dropshipping process is easy. With this approach, the supplier maintains a stock of certain products that you advertise to customers. When a customer goes to your website or online store and purchases the item, the supplier ships it directly to the customer and you make some profit! 


Wholesalers sell large quantities of items in bulk at a low price per unit. Keep in mind that these items are made available to other businesses, too, so it’s best to purchase products from a wide range of wholesalers so that you can feature a unique blend of products for sale. 


When you purchase products directly from the manufacturer, you become the middleman. Like wholesalers, you’ll likely need to purchase your items in bulk to keep the costs low, but you’ll also have to store the products yourself once you’ve put in your order.

The biggest benefit to working with manufacturers is the flexibility to customize the items you want. You’ll have the ability to work with them to custom the items that they make, improving the design, adding features, or showcasing your brand. This helps to set you apart from the competition.

Keep in mind that customizing a product may mean that the manufacturer has to adjust their equipment in between runs, which means that costs can sometimes skyrocket for specialty orders.

DIY Products

Got a talent for handcrafted creations? Making your own products lands you in the category of “direct-to-consumer brands.” 

Direct-to-consumer brands have no middleman involved, which creates a smaller supply chain; an appealing aspect to modern consumers and businesses that prefer to have a greater degree of control over the purchasing process. 

Selling your own goods comes with a few benefits you simply can’t get from other sources. Your items will be unique, unlike the items you’d buy in bulk from wholesalers or manufacturers. You’ll also have full creative control to change and improve items as you see fit. 

Like the bigger manufacturers that have already taken advantage of direct-to-consumer brands, your items are sent directly to the consumer.

Six Steps to Successful Product Sourcing

Before you can begin purchasing and building up your inventory, it’s important to make sure you’re getting the best items at the lowest possible price point. To do this, follow these six simple steps:

1.  Do Your Homework First

The most important step is the first one: research! Before you start stocking up on inventory, make sure that you’re purchasing the right items. 

So how can you properly predict consumer demand? Not with a crystal ball! Instead, conduct market research. You’ll need to assess the popularity of the items you want to sell. Check social media. Are people talking about this product? If so, what are they saying? 

You can narrow things down a little further by analyzing current market trends. Look at other companies that are selling the product. Major discounts might just be a sign that a company has not had a lot of success with a product line. 

Next, think about your target audience. Is your product durable and long-lasting? Is it something that your customers might want on a regular basis? Would they want to buy more than one if you offer a variety of colors and sizes? 

Understanding the demand for the item is the essential first step in product sourcing that can help give your business an edge in a competitive market. 

2. Reach Out to Suppliers

Once you’ve zeroed in on the products you want to feature, the next step is to reach out to suppliers. This is the time to ask questions. 

Armed with the information from your research, you’ll have a better understanding of what you want from the supplier. This can help you to narrow the field and choose the right partners for your business. 

3. Sample the Products

Now, it’s time to check out the inventory. Ask the supplier for a sample of the product you’re looking to buy. If you blindly order a product in bulk, only to find out that it wasn’t what you thought it was, you’ll waste your time and money.

When your product arrives, open it with fresh eyes, thinking about how your customers might feel if they received it in the mail. Is the packaging well designed to protect the items inside? Did it come on time and in the condition expected? Are the materials high-quality?

4. Trial-Run Orders

The next step in this process is to give the relationship a trial run. Ask the supplier whether you can get a limited number of the item you want to sell. 

This is a stepping stone that you can take advantage of before purchasing a large quantity. While it may be more expensive to buy a smaller number of units, this can help to protect your checkbook in the long run.

Once you receive the items, you can see how they sell and evaluate customer feedback before you commit to a larger quantity.

5. Test the Supplier

A trial run also gives you the opportunity to try out the supplier. This offers you a first-hand look into what a future relationship with a given supplier might look like. 

Consider the following as you go through the process:

  • Did they meet or exceed your expectations? 
  • Did the item get to you in a timely manner? 
  • How was the communication?
  • Was the quoted price point accurate?

A good working relationship with a supplier directly impacts the operations of your business. Taking the time to assess these things early on can pave the way for future success.

6.  Shop Around

The supplier market can be fickle. Changes in supplier tools, new management, or sudden drops in demand can affect the quality and even pricing. That’s why it’s always a good idea to have a contingency plan. 

Even after you’ve decided on a supplier, keep shopping. Even if you decide to purchase from a single supplier, it’s good to have options available in the event that the relationship falls through. Having a contingency plan in place can avoid disruptions for your business! 

Benefits to Having Multiple Sources for Your Products

With multiple suppliers, you can compare quality or opt for the one that offers better prices. You’ll also reduce the likelihood that you’ll be left without essential products. 

While communication might be easier with a single supplier, multiple suppliers can act as a sort of insurance. If one supplier runs out, others may have the items you need, so your customers will never be hung out to dry! 

Having multiple suppliers is also a good way to do a little quality control. You’ll be able to compare the products side-by-side to make sure the suppliers you’ve chosen are still living up to their initial quality standards.

Partnering With a 3PL

Successful product sourcing is the backbone of your business. With it, everything else falls into place. 

Once you’ve thoroughly researched and carefully selected your supplier, you can start optimizing your business in other ways, like partnering with a reliable third-party logistics service (3PL). At Print Bind Ship, we take the stress out of dealing with inventory. When orders come in, we fill the order for you and ship it to your consumer, even customizing the packaging to meet your needs! We’ll help you save on storage, time, and labor. Contact us today for a free consultation to find out how we can make a difference in your small business!