Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20 in Community Help Boards in Community

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Last Post Mar 20, 2007 12:18 PM by: deirdre@ebay.com

Replies: 45

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Feb 27, 2007 2:07 PM

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Topic: Member Workshop: Sourcing Products with Multiple Types of Suppliers

Host: whatdoisell
Date: Tuesday 03/20
Time: 11:00 a.m. to 12:00 p.m. Pacific time
Location: Workshop Board

Description: Product sourcing is a cornerstone of every successful eBay business. But where to get your products? Most people rely on one or two avenues of suppliers to purchase their inventory. But in order to be successful in today's diverse online marketplace, you'll need to source your products from multiple types of suppliers. Please join Lisa Suttora Founder/CEO of What Do I Sell.com and best-selling author of "What to Sell on eBay and Where to Get It" (from McGraw-Hill publishers) as she discusses the different supplier options available to your business and how to use them effectively.

Cheers,

Deirdre
eBay Community Development

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Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:04 PM

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Introduction

Hello! Welcome to today’s workshop!

My name is Lisa Suttora and I’m the Founder and CEO of WhatDoISell.com™. We are an eBay Certified Service Provider that specializes in helping eBay sellers figure out what merchandise to sell, where to get it and how to sell it profitably.

No matter what kind of merchandise you sell, brand new consumer goods or pre-owned products, you’ll want to consider sourcing your products from a variety of different types of suppliers.

Understanding all the different supplier options and how they can benefit your business will give you access to a broader spectrum of products and the ability to source even more of the products that your buyers want.

In today’s workshop, we’ll discuss the different kinds of suppliers and how they can help you build your business. We’re also here to answer your questions about suppliers.

So let’s get started!

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:07 PM

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Product Sourcing the Old Way: The “Single Supplier” Business Model

It use to be when people thought about how they would build an eBay business – they would define their business based on the type of supplier they dealt with.

For example, some eBay sellers built businesses around liquidation merchandise. Others built business based on bulk dealing strictly with wholesale suppliers and purchased only current in-season merchandise. Still others sourced their products entirely from pre-owned sources such as estate sales.

While it is true that your business with have a primary kind of supply channel, to build a successful business model these days you will find yourself working with different kinds of suppliers – and with different kinds of suppliers at different points in your business.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:09 PM

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Product Sourcing the New Way: The “Multi-Supplier” Business Model

As eBay has evolved and online retailing in general has evolved, it is no longer possible to build your business based on single supplier product sourcing.

With the Multi-Supplier Business Model, you’ll use multiple types of suppliers for different reasons in your business and at different times during the growth of your business.

With the Multi-Supplier business model you’ll be able to combine the benefits of each supplier to leverage your product sourcing time, efforts and money and most importantly, bring a diverse and dynamic group of products to your eBay buyers.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:10 PM

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The Distribution Channel

Product suppliers fall under the umbrella of what is called the Distribution Channel. And all product suppliers are NOT created equal.

Between the time a product is made and the time it lands on your virtual eBay store shelves the product goes through what is called the Distribution Channel.

When you work with multiple suppliers you will be working with companies at different points in the Distribution Channel.

They serve different functions, and have different places in your business. Additionally they will offer a different cost basis for their merchandise.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:11 PM

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Working With the Right Suppliers at the Right Time

Next we are going to discuss what each kind of supplier does and how they can best be utilized in your business.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:14 PM

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Manufacturer

A manufacturer is at the top of the supply chain. These are the folks that make the products. Mid-size to large manufacturers generally do not sell directly to retailers. They sell their products to Distributors and Wholesalers.

New companies and smaller manufacturers are often times still at the point where they will sell directly to you, the retailer.

If you are dealing with a new/small company who manufactures their own products or imports their products, they may be your only source for the product. Generally in these situations you can buy in small to large quantities.

You will find that small or new companies will have smaller minimum purchase requirements which enables you to test market products or make an inventory purchase if you are a new business (as well as be your source for reordering products.)

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:16 PM

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Distributor/Wholesaler

After a product is manufactured it is typically sold and shipped to a distributor/wholesaler (the term can be used interchangeably) who then sells the merchandise to either a manufacturer’s representative or a retailer.

Here is where you will do your bulk Lot product sourcing – i.e., order quantities of product. If you are ready to order quantities of wholesale product and ship it yourself – you will want to deal with the distributor/wholesaler of the product.

Most distributors/wholesaler will buy products in large quantities and break them out into smaller cases as well, so if you are a new eBay business you can start purchasing from a wholesaler in a smaller quantity of inventory.

However, some distributors and wholesalers will only sell in larger quantities with larger minimum orders. If you are ready for product volume and can invest in a larger minimum order, working with this kind of wholesaler/distributor will be right for you. If not, you’ll want to investigate the next option in the Distribution Channel, the manufacturer’s rep.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:17 PM

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Manufacturer’s Rep

A manufacturers’ representative contracts their services to a variety of manufacturing companies. Manufacturers’ representatives generally sell complementary products made by different manufacturers.

You’ll find manufacturer’s reps at trade shows, merchandise marts and sometimes assigned by a large company to cover a territory of retailers in your local city.

The advantages of working with a manufacturer’s rep is that you will be able to place smaller more manageable orders. The disadvantage is that you will pay a higher base price for your merchandise.

If you sell in a niche, establishing relationships with manufacturer’s reps can be a huge boon for your business. Because they represent multiple complimentary product lines, and are very familiar with what is going on in their industry – they can be an excellent resource on trends, which products/styles are popular and provide you with contacts of other suppliers who sell complimentary products.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:18 PM

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Liquidators, Close-out Dealers, Overstock Dealers

These suppliers specialize in the sale of excess/returned goods supplied to them from manufacturers, wholesalers and retailers.

Even if you primarily sell first-run products, you’ll want to tap into some good sources for liquidation products in your niche. End of season products, discontinued styles of popular products, overstock etc. can all be very attractive additions to your product line for your customer.

Frequently, eBay sellers who focus on selling current, first-run products will shy away from selling any type of liquidation or close-out merchandise. But lower base cost and the ability to run a sale or special buy can bring a host of new customers into your eBay store, who will then buy your other current season merchandise.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:22 PM

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Drop Shippers

Drop Shippers can either be a company who specializes in drop shipping a wide variety of products or a distributor or wholesaler who will also drop ship their own products.

Use a drop shipper in your business to:

-Test market new products. This will allow you to test new products for your product line without incurring the expense of purchasing a non-proven product in bulk

-Supply heavy, hard to ship or expensive products. This will alleviate the additional time/effort/expense of stocking and shipping hard to ship or expensive inventory.

-Supply products that you only sell occasionally. This will allow you to sell products that compliment your strong selling products and that are appropriate in your eBay store in order to have a full product line WITHOUT tying up your cash in carrying this inventory.

-Automate your business. Although the profit margin for drop shipped products will be smaller than if you buy in bulk, there will be times when the potential to automate your business and ship more product will make up for the higher base cost of a drop shipped product. This will allow you to automate the delivery of your product line to some extent.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:23 PM

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Retailers

As an eBaypreneur, both online and offline “bricks and mortar” retails can be excellent source of products for your business.

Online retailers, local retailers and even other eBayer’s can prove to be a profitable source of inventory.

Shopping for products on clearance, off-season, discontinued merchandise or hard to find merchandise are all ways to use retail sourcing to your best advantage.

Additionally buying products retail, one unit at a time and test marketing them on eBay is an excellent way to test market demand for a product before going to the time/effort/expense to source them wholesale.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:23 PM

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Don’t Limit Yourself!

No matter what you sell, limiting the types of suppliers that you are interested in working with will limit your product sourcing options and put limits on the variety and selection of products you can offer to your customers.

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:26 PM

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Help! The Supplier Won’t Work with Me

There is nothing more frustrating than when you run into roadblocks with a supplier that you really want to do business with!

While it can be frustrating, here's the reality - there will always be suppliers who for one reason or another will not work with you.

Maybe the supplier requires you to have a physical storefront and you only sell online. Maybe the supplier you are interested in has a high minimum order requirement and you are not at place in your business where you can make that kind of investment.

No matter what the reason is, if you find a supplier who won’t work with you, put them on the back burner and move on.

Too many times people get hung up on the fact that they must work with a particular supplier and they keep persisting to the exclusion of many other supplier options.

This only serves to hurt your business growth.

If a supplier will not work with you, put their information in a file and follow up with them in 4-6 months. These days suppliers update their policies on a regular basis, so it is possible that someone who won't work with you today, will work with you 6 months from now.

And until then keep talking to other suppliers!

Member Workshop: Sourcing Products with Multiple Types of Suppliers-Mar 20

Mar 19, 2007 10:26 PM

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Suppliers Know Other Suppliers

Often times your best source of information on a new supplier is the supplier that you currently have on the phone! Don’t be afraid to ask! If the supplier you are talking with doesn’t carry the product you want, ask them if they can refer you to someone who does. Individual industries are small ponds and suppliers know each other. Asking for a referral can be an excellent way to tap into otherwise “hidden” suppliers.

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