Before entering the world of sourcing and international import / export there are a few things that you need to consider:
What products are you going to sell?
It might seem like an obvious statement but often doing your research and narrowing down opportunities within certain product segments is the most important aspect before contacting new suppliers. Many new buyers or people starting online buying / selling companies want a quick fix however finding the right product is critical on your success.
There are hundreds of thousands of manufacturers and suppliers from around the world, make your life easier by know exactly what you are looking for first.
If you are thinking of selling your products online then you need to research the current market to see what is / isn’t selling. If a product is selling well, is there room in the market for another player? If no one is selling it is this a gap in the market or is there a reason no one is selling? (No demand)
Where are you going to sell your products?
Depending on your venture you will need to identify which route to market / channel you will sell your products through:
- Online market place – Amazon / Ebay
- Your own website
- Retailer (online / brick & mortar)
By knowing where the next step in the supply chain is for you to sell your products will allow you to gather more information that will be used when sourcing your products.
At what price?
One of the most important aspects is price.
Depending on which sales channel you will use, will dictate what price you charge your customers, which will then dictate the buy price you will need from the suppliers.
In order to gain an understanding of the best cost price you need from your suppliers, you will need to work backwards from the RRP (Recommended Retail Price).
e.g. if you are starting your own brand of toys and looking to sell through:
- Amazon – as you will be selling directly to the end consumer there are not many links in your supply chain, so you will be more flexible when setting your RRP. You will need to identify an RRP that customers would be willing to spend.
Then you will need to factor in your costs that are associated with the individual sale.
– Shipping / Delivery
– Duty / Import tax
– Charges of each platform – (Amazon usually works off a 10-15%)
You will also need to identify what mark up / margin you will be taking on each sale.
Once you have these costs you will be able to work backwards to identify what price you will need to buy at. Then you can see if it is a viable option.
- A retailer – If you are selling directly to a retailer then you will need to factor in their margin expectations. This is variable depending if it’s an online or Brick & Mortar retailer. Brick & Mortar can expect anything from 15-60% margin depending on category.
Once you have settled on all the above then you need to find the right supplier for you.
If you would like any help or advice for your new adventure – now matter how big or small please drop us a message we’d be happy to help: [email protected]