Quick answer: Start with a specific customer and product brief, validate demand and landed cost, then test a small order before scaling. This guide focuses on the decisions that reduce inventory and supplier risk.
Many people are selling online nowadays, and building thriving businesses that are changing their lives. For beginners and startups, how do you get started?
The first thing you are thinking probably about is how to source the products and sell them in your online stores. In this article, we will discuss this topic and share some fresh ideas about how to decide the niche product we should sell.
1. What is online store product sourcing?
The online store also called E-commerce store, they are the online shops that are attached to the mainstream cross-border retail platforms, such as Amazon, eBay, wish, Esty, etc. Or Shopify independent site, that sells to consumers.
E-commerce product sourcing needs to study the explosive goods in the platform, study the platform operation rules, has studied the consumer preferences, consumption habits. Digging into the subcategories, find the consumption rules and consumer pain points, and find the corresponding niche products for procurement and subsequent marketing and sales.
Supply chain sourcing involves the evaluation of product quality and cost control, which is an important part of e-commerce operations and relates to whether the price of the products sold is competitive.
E-commerce product procurement includes a series of processes and tasks such as finding suitable products and suppliers, confirming quality and details, following up on product production and international shipping links, following up on inventory, and timely replenishment. Also need to pay attention to the following details, etc.
- High procurement rate: the probability of not finding the goods is relatively small.
- Cost-effectiveness: the goods procured should be of good quality and also at a low price.
- Stable supply of goods: can’t meet the often out-of-stock situation.
- Timely logistics: to control the suppliers for timely delivery, choose a reasonable shipping method pay attention to the location of the supplier.
- Reasonable inventory: when sourcing products also need to monitor inventory and sales in real-time to ensure that the inventory is not in stock and not too backlogged.
Although the sourcing process requires a lot of juggling and effort, if you can find an experienced sourcing company to work with, you can minimize the workload. A sourcing agent will help you take the easy way out of product sourcing. Efficiently find the products you need, ensure their quality and on-time shipment, and arrange the most appropriate international shipping methods.
2. How to decide the niche product is profitable to sell
Selling online, product selecting is crucial, we should choose a popular and with profit points also the competition is not so fierce product better. In other words, it is to choose the right niche products. Niche products audience will not be a lot, because the traditional market failed to meet their needs, the niche products that emerged, there are good profit points. Relative to its market is called Niche Market. Now we analyze from the following 4 aspects, a niche market can be done or not. Can give you some ideas in the selection of products.
2.1 Explore AliExpress
We can use five stars as a criterion for judging, and a rating of 5 stars means very promising. A low rating means that the product is not promising.
- Number of Product
We use specific keywords to find niche markets. We only choose products with free shipping and a rating of 4 stars or higher.
If we can find more than 2000 products, then the niche is rated 5 stars
If there are 500-1999 products, the niche rating is 4.5 stars
100-499 products, the niche rating is 4 stars
For 1-99 products, the niche rating is 3 stars
- The popularity of niche market
Free shipping products with a rating of 4 or more, sorted by sales. We select the top ten products in terms of sales and calculate the average of their sales.
If the average sales are greater than 2000, then this niche market rating is 5 stars
Average sales 500-1999, this niche is 4.5 stars
Average sales 100-499, this niche is 4 stars
Average sales 1-99, this niche is 3 stars
- Number of reliable suppliers
The same filtering criteria as in the previous step, select the top 10 stores. Use the judging parameters of the Selling Platform itself.
How long the store has been open Store rating Percentage of good reviews Whether the product is consistent with the description Whether the seller is happy to communicate shipping speed. We believe that a good rating is the most important and is a key factor in the success of a store.
If the average rating score is >96%, then the niche rating is 5 stars.
95%-94.9% rating is 4.5 stars
94%-94.9% rating of 4 stars
93%-93.9% Rating of 3 stars
- Profit estimation
We need a niche market that can bring us good profits. The prices of the products sold on AliExpress are generally low. As a professional sourcing agent, we always can source products at a better price than AliExpress. We can set a relatively high price on our website or e-commerce platform (which needs to be compared with the competitor’s price) to get a significant return.
How to estimate the potential profit? We choose the most popular products in the niche. Then we select 10 other online stores. We calculate the average price of the same product in the 10 online stores and compare it with the price of the product on AliExpress.
If the price difference is more than 250%, then the niche is rated 5 stars
If the price difference is 100%-249%, the rating is 4.5 stars
50%-99%, a 4-star rating
Difference 1%-49%, rating of 4 stars
2.2 Analysis Google Trends
Google trend is a great tool for gaining insight into public interest. It can also be used to analyze product trends. It can tell us how search volume changes over time, the regional distribution of searches, the most recent popular search terms, and if the search terms are seasonal.
To choose a product category, the easiest thing is to rely on the data from AliExpress and search for possible product categories. Then go to google trend and enter keywords, here we take knitting as an example. You can change some settings, regions of interest, time frame, category, content type.
Criteria: If the trend is up, give the niche a rating of 5 stars
If it’s flat, rate it 4 stars
For a downward trend, rate 3 stars
Some products are seasonal, they are only in demand at certain times. Some are non-seasonal. It is ok for you to sell seasonal products and non-seasonal products at the same time. Selling only seasonal items is not recommended.
In addition, you can also see the most popular related searches, which is very important for the promotion of the online store, for SEO, and PPC advertising.
2.3 Facebook Group Number
Facebook, as a social media application, is also a good tool for promoting online stores. To check if the niche we have chosen, has the potential to be profitable. Enter the product keyword in the search box and select the group. You can see the groups that contain the target keyword in the group and also the number of members.
A good niche has at least 15 groups with at least 30,000 members each. We can also view the public homepage to give you a better idea of the popularity and opportunities in the niche.
If there are 10 groups with more than 30,000 people per group, the niche is rated 5 stars.
5-9 groups with a 4.5-star rating
1-4 groups with a 4-star rating
These parameters are not only useful for determining specific niches, but also for determining related niches. For example, when judging a knitting niche, you can also consider sewing and politburo patterns, process materials, etc.
Choosing a product that can be easily promoted through PPC advertising and SEO tools is also a good way to go. Need to generate some valuable content for your store. Optimize images and videos and choose keywords that are relevant enough to the category and are competitive.
2.4 Search volume in SEO keyword planner
Login to your google account and open Keyword Planner. Select the “Discover new keywords” option and enter the name of the niche to get the results.
You can get the google search volume for the keywords related to the niche.
If the search volume is between 10,000 and 100,000, then the niche is good.
It is also better to skip the niche with too much search volume, for example, greater than 100K. Because this market is too broad, competition is very big. If the search volume is less than 5 thousand, it means that there may be no competition here, but also no profit.
If the search volume is 5k – 50k, this product is suitable for dropshipping. Give this niche market a rating of 5 stars.
2.5 Tips for selecting niche product
While choosing a niche market, you also need to consider the following points.
1) Consider the shipping cost, choose products that are relatively small or lightweight.
2) Avoid fragile products as much as possible, otherwise, the cost of pre-sales security packaging is an expense, and after-sales problems are constant.
3) From after-sales considerations, choose products that are simple to operate and easy to get started.
4) profit margin can be at least 50% or more, you can follow their own understanding or proceed to the price of the product, and Amazon, eBay, Esty, and another e-commerce platform for price comparison.
5) From the aspect of increasing customer stickiness, the packaging should be unique or can provide design services, so that customers go from these intangible services to increase your sense of identity, and is also a way to prevent follow-up sales.
6) Seasonal products can not be the only ones. Christmas gifts, for example, can only be for seasonal auxiliary products.
3. Where to source the products?
Sourcing from China suppliers has huge advantages. Firstly, the products will be cheaper and the minimum order quantity will be lower. This means you can start with lower costs. You’ll find the products you want because there are so many options and you can start building on a smaller scale. You will find that the products offered in China are easy to do private label – a major factor in most success stories. The following are the 2 main channels for sourcing products from China, online and offline.
The offline channels are mainly traded shows, local wholesale markets, and factory sourcing. Nowadays, due to the epidemic, offline sourcing is not possible. However, you can work with a Chinese sourcing agency and let them help you find quality suppliers from offline channels.
The main platforms for online channels are the following.
Alibaba
Alibaba is one of the largest online commerce providers in the world. It handles more business than any other e-commerce company. The company is based in China and has three websites – Taobao, Tmall, and Alibaba – with millions of users.
AliExpress
AliExpress is different from Alibaba, although Alibaba owns AliExpress and is using it to expand its business outside of Asia, challenging companies like Amazon and eBay. AliExpress offers good quality products at competitive prices in small quantities and is suitable for small wholesale and drop shipping. Alibaba is more suited for high-volume purchases.
Made-in-China
Founded in 1998, Made-in-China has a long history of providing B2B services and products. It is regarded as the leading third-party B2B e-commerce platform in China. The company’s vision is to bridge the gap between global buyers and Chinese suppliers. It offers 27 categories of products with 3600 sub-categories.
Global Source
Global Source facilitates trade with the Greater China region. The company’s business is focused on exporting electronic products, particularly electronics and mobile electronics. The company’s core business is the promotion of export trade between Asia and the rest of the world at trade shows and online, using its range of English-language media.
DHgate
DHgate offers millions of quality products at wholesale prices to merchants. They offer prices up to 70% below normal market prices, providing sellers on the e-commerce platform with substantial profits. The number and popularity of well-known brands on Dunhuang.com are relatively weak compared to other sites.
Related information:
Before Sourcing From B2B Marketplace, These Have to Know
In the actual purchasing process, you will find that trying to find a good supplier from the online platform is not an easy task. The quality check, whether the products are stable and available, whether the delivery is timely, whether the supplier is honest and reliable, whether they can customize the production according to your requirements, all aspects need to be noted and controlled.
Especially when the goods you purchase are from different suppliers, the time and effort required are multiplied. Online sellers can overcome these challenges by partnering with an experienced and reputable China sourcing agent. Selecting a sourcing agent who has decades of experience in helping online sellers source from China. Ideally, the agent also has an established manufacturer network that can help you find a reliable supplier in a quicker time instead of going through the laborious process of searching for China manufacturers.
4. Key points to pay attention to product sourcing
Now you are ready to source items for your online business. We just have a few more tips for you to make sure you succeed and help you get the best possible deal on your products.
4.1Always ask for samples
Please make sure to get a sample before going through with the order. Most suppliers are willing to provide a sample, to allow you to evaluate the quality. Never place an order to a manufacturer until you have checked the samples and confirmed all the specifications.
4.2 Place a trial order
Especially for the supplier who is the first time to cooperate with, better to place a trial order at the minimum order quantity before any bigger quantity.
Trial orders give both parties a chance for mutual adaptation, testing whether the supplier can complete the production of goods with quality and quantity guaranteed. Whether the communication process is positive enough when facing a problem if the supplier takes positive action to solve the problem. Then can decide whether to continue to cooperate in the process of repeat orders or if they got enough ability to handle the bigger order in the future.
4.3 Ask for contact information of the previous customers
Check their business license and do an internet search to see if they have any previous disputes. Ask for the contact information of the customers they have worked with in the past and find out if this company is reliable and worth working with by calling their previous clients.
4.4 Choose the right shipping method
Based on the quantity, CBM, and weight of your goods and also consider the urgency and timeliness, decide the right shipping method.
If it is normal replenishment, the goods will be sent to AMAZON FBA warehouse or private address by Matson shipping to US.
European countries, usually choose rail transport. For the time requirements are relatively high, emergency replenishment. Air cargo will also be used. But compared with ocean shipping, the cost is much higher.
So trying to control the frequency of inventory replenishment and leave more time for transportation, will save a lot of costs on transportation.
5. Conclusion
Sourcing products and selling online is still a promising business that is worth doing, especially for startups. However, nowadays, under intense competition, finding a niche market with profit is important. Hiring a trusted sourcing agent can ease your workload and achieve success more smoothly. Working with agents to take care of the tedious work during the supply chain procurement process. No matter how many goods you purchase, how complex, agents will help you communicate with each supplier manufacturer and follow up on all the details, to ensure accurate production.
This is especially important for startups that are unfamiliar with the international procurement process. An experienced purchasing agent will walk you through the purchasing process and use their experience to help you build your business faster.
Style Sourcing with over 10 years of experience is your ideal option, we have helped our valued customer’s manufacture and source products at low cost with good quality.
Next steps for a safer sourcing plan
After choosing a product, compare reliable China suppliers, confirm quality-control checkpoints when relevant, and document the landed cost before you place a bulk order.
