What is Product Sourcing?

by Worldwide brands CEO Chris Malta

Many people start out selling online by cleaning out their attics, going to garage sales, and selling those finds on eBay. That's a good way to learn the auction business and get your feet wet, but it will never be a full-time living.

Others buy "Complete Internet Stores" that already come with products to sell, which simply isn't a real business. This just turns you into a commissioned salesperson for someone else's company.

If you plan on creating a thriving business that will support you to the point of replacing your “day job” and more, you will need to find genuine, reliable wholesale sources of quality products to sell.

“Product Sourcing” simply means finding and qualifying those rare wholesale suppliers who are willing to work with small, home-based Internet Business Owners.

Notice the word “Qualifying”. Just finding someone that says they sell at wholesale isn’t enough. There are other things that you need to find out about them.

In order to understand the most effective ways to Source Products, it’s important to understand the least effective ways FIRST, so that you can recognize and avoid them. There are a couple of things you should understand before you begin a serious Product Sourcing effort.

First, what are “Middlemen”?

There are a huge number of people on the Internet who want you to think they’re a wholesale supplier, when they’re NOT.

A “Middleman” is usually a single person who works from a HOME COMPUTER. He has his own Accounts with a REAL wholesaler. Then he build s a web site that says HE is the real wholesaler! He is NOT. His only goal is to get in between you and the real wholesaler, and charge you an extra markup on the products. He just emails your orders to the REAL wholesaler, and has the products delivered to you or your customer.

Here’s how Wholesale Product Supply SHOULD operate:

A Manufacturer sells a product to a Factory Authorized Wholesaler at $3.50. The Wholesaler makes it available to You, the Retailer, for $5.00. You sell it Online for $7.50. This is the way things are supposed to work.

Here’s how it works when you deal with a Middleman:

The Manufacturer sells a product to their Wholesaler at $3.50. The Wholesaler sells it to a Middleman for $5.00. The Middleman tells YOU he IS the Wholesaler, and charges YOU $7.50. YOU have to sell it for $10.00 to make a profit, and you find you can’t compete with other Online Sellers who DO NOT work through a Middleman.

Your Product Sourcing will be most effective when you work directly with REAL Wholesale Suppliers, NOT Middlemen! That REAL Wholesaler should have physical offices with several people on staff. You can contact their local Chamber of Commerce or the Better Business Bureau to Qualify ANY wholesaler you consider using. You should also use the Search Engines to search on their BUSINESS NAME, to see if other people have posted complaints about them online.

Finding Real Wholesale Suppliers

When you're looking for information, the first thing you do is go to the Search Engines, right? Well, that isn't always the best thing to do, especially when you're looking for real Wholesale Suppliers.

There are two main reasons why the Search Engines are not a good place to look for real Wholesalers.

First, thousands of these unscrupulous Middlemen are so desperate to get your attention that they have flooded the Search Engines with their own misleading marketing. The Search Engine keywords that people use to search for Wholesale Products are the “sweet spot” for Middlemen shoot for. When you use those keywords on the Search Engines, you’re going to get thousands of links that will take you straight to the Middlemen. These people spend so much effort flooding the search engines with their ads that a real wholesaler hardly stands a chance of being noticed through all the smoke and mirrors.

Second, real wholesalers don’t really want to be noticed on the Search Engines to begin with! Here’s a hard reality: small, home-based businesses are not considered to be very important a real Wholesaler, in terms of volume of business.

This is not personal. There is nothing wrong with being a home-based Internet business. It’s simple economics, from the Wholesaler’s point of view. They already have major accounts with huge physical store retail chains. In terms of their overall business, they don’t feel that Home-based businesses are able to bring in all that much money for them. Because of that, most of them see advertising themselves in the Search Engines as a waste of time and money.

So YES, they may be willing to work with you, they just don’t go out of their way to advertise that fact.

That’s the second reason that the Search Engines are generally not a good place to find genuine Wholesale Suppliers.

All right, now that we have that happy little bit of news out of the way, we can talk about what REAL Wholesale Suppliers are, and how to find them yourself. The best place to get started is to talk about why Wholesale Suppliers even exist in the first place!

Most people are under the impression that the best place to Source Products is to get them directly from the manufacturer. That almost never happens, and when it does, it is extremely rare! You’ll almost always work with Wholesale Suppliers.

Manufacturers make things; they don’t want to be bothered with selling and shipping them to retail businesses as well. That’s why Wholesale Suppliers exist; they are a service industry that works with product manufacturers in order to get products from the factory to you, the Retailer, which is a great help to product manufacturers.

If Wholesale Suppliers did not exist, every product manufacturer would have to hire a Retail Sales Force, set up Distribution Centers, buy trucks, and build an entire Distribution Network for their products. That’s like every different product manufacturer having to re-invent a very expensive wheel over and over again! So, genuine Wholesale Suppliers fill a very real need for manufacturers; the Wholesalers already have the sales force, the warehouses, the trucks, the distribution network and more, and can carry many product lines from many different manufacturers at the same time.

While there are some manufacturers out there who will sell to you directly at wholesale, they are typically very small companies who do so because they need the business. While this might sound attractive at first, remember that small manufacturers also go out of business much more frequently, or can’t make enough products fast enough to fill orders. They can leave you hanging with backorders you can’t fill. Very small manufacturers like this are also too small to be considered worth a genuine Wholesale Suppliers’ time; the big Wholesale Suppliers don’t want to bother carrying the lines of small manufacturers until their products are proven in the market, or reach a certain level of sales. So if you do come across a Manufacturer who is willing to sell to you directly, please investigate the reason they’re willing to do so!

Straight to the Source

So, when it comes to finding and qualifying real Wholesale Suppliers and avoiding the home-based Middlemen, who’s got the info you need? Let’s talk about going straight to the Source.

As you’ve seen here, you could spin your wheels forever trying to contact all the so-called “wholesalers” you see in the Search Engines and trying to figure out if they’re Middlemen or not.

There is, however, one resource you can talk to who already knows who the REAL Wholesale Suppliers are.

Who is it? It’s the manufacturer of the products! After all, the manufacturer is the one who ‘Factory Authorizes’ their Wholesale Suppliers to begin with!

Manufacturers have Sales departments. They WON'T sell products to you or me, because we’re Retailers. Their job is to sell to Wholesale Suppliers, who in turn sell them to you and me, the Retailers.

Manufacturers Sales Reps know who their legitimate wholesalers are, though. All you really have to do is call them and ask; in most cases, they WILL tell you!

First, though, you have to find out WHO manufactures the product you want to sell!

For example, if you want to sell RCA Stereo equipment Online, you’d think that you have to find a phone number for “RCA”, right?

Not true. RCA products are actually manufactured by a company called Thompson Consumer Electronics. That’s who you’d want to call. If you’re not sure who makes a product, look at the product itself. In the case of an RCA stereo, if you turn the unit around, you’ll find “Thompson Consumer Electronics” stamped right into the plastic on the back of the unit.

Somewhere on any product’s packaging or on the product itself, you’ll almost always find the name of the Manufacturer.

Let’s say you want to sell a product called “Mom’s Ankle Wax” Online. You look at the back of a can of Mom’s Ankle Wax, and find that it’s made by Mom’s Manufacturing, in Orlando, Florida.

You call Mom’s Manufacturing directly, and ask for the Sales Department. Remember, this Department won’t sell to Retailers, but all you’re looking for at this point is information. You’re trying to find out who the REAL wholesalers of this product are.

Here’s how I do it: I say,

“This is Chris Malta, of Worldwide Brands, in Orlando, Florida. I’m planning to Retail your products, and I was hoping you could give me a list of your Authorized Wholesale Suppliers that I can contact”.

Almost every time, they tell me “Sure, no problem!” They’ll give me the names and contact info for a number of their Wholesalers. They don’t mind, because they’re helping their Wholesalers gain new clients, which means they do more business as a manufacturer!

And there you have it. No worries about Middlemen. I went right to the source, and got the correct information in one phone call.

Now I know who the real wholesalers are. The next thing I have to do is find out which of them will work with me. I’m a small, home-based Ecommerce business, and most large wholesalers won’t be very interested in such a small account. I may get one of Mom’s Ankle Wax Wholesalers to work with me, and I may not.

So, I call the first wholesaler on the list. I ask for the Sales Department, and repeat my little speech, only this time, I’m talking to a Wholesaler I want to buy from directly. I’m going to ask the Sales Rep to sell products to me, not just give me information. I get Sales Rep Jane on the phone, and I say,

“Hi, Jane! This is Chris Malta, from Worldwide Brands in Orlando, Florida. I’d like to Retail Mom’s Ankle Wax, and I need to know how to set up an Account with you.”

Sales Rep Jane is going to ask me a few questions about my business. She may ask things like how long I’ve been in business, and how many store locations I have. This is when I have to be honest with Jane about the fact that I am a Home-based Internet Business. I don’t have physical stores, I’ve only been in business for a short time, etc., etc.

If you want to have a REAL business, you have to answer these questions honestly, and most of the time the honest answers get you turned down for an account. Sad, but true. Sometimes, though, the wholesaler will be okay with these things, and that’s the wholesaler you’re looking for!

If this one won’t give me an account, I’m going to call the next wholesaler on the list and start again.

So, that’s real Product Sourcing. That's how you find and work directly with real Wholesale Suppliers!

Here at Worldwide Brands, that is exactly what our full-time Research Staff has been doing every day of the week for nearly six years. We have contacted tens of thousands of Wholesalers for you already. Those Suppliers who have already agreed to work with Home-based Internet Businesses are in our Drop Ship Source Directory and The Light Bulk Wholesale Directory.

Learn More @ Worldwide Brands


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