You want to start your own business, decided on a niche and maybe even know what you want to sell. But where do you actually get the product from? Is it something you’re planning to create on your own or do you want to re-sell an existing product? In this article, I’ll go through the different ways of sourcing a product and will explain the pros and cons of each option.
There are 3 ways to source your product
- Make the product yourself (handmade or with a manufacturer)
- Dropship
- Source an existing product from a manufacturer
How to Source a Product Infographic
Make The Product Yourself (Handmade or With a Manufacturer)
If you have a product in mind that doesn’t exist yet, you could create it yourself. Keep in mind that you’ll have to take care of shipping and fulfillment yourself. This category can be broken down into handmade and creating the product with the help of a manufacturer.
Handmade 
Creating the product completely by yourself can be an option if you have a talent like drawing, knitting or jewelry making. This allows you to transform your hobby into a business. Maybe you want to do a joint venture with a talented friend in which you focus on the business side. You can also always pick up a new skill like soap or candle making.
Pros 👍
- You can get started right away
- You have full control over branding
- It’s a cost-effective way to test if your idea is feasible
- You can produce small quantities
Cons 👎
- There’s a limited quantity you can create on your own
- You’ll spend a lot of time on making the product and might not have enough time for other areas like marketing
- Buying a small number of raw materials can be expensive
- You need to make sure to follow food safety and labeling requirements
Work With a Manufacturer
When you’re planning to sell a more complex product that you can’t create on your own, you can work with a manufacturer. I recommend to first work with a manufacturer in the U.S. Yes, this will most likely be more expensive than going overseas but it offers a couple of advantages. You can see your samples faster, the company is in the same time-zone so communication is more efficient and it’ll be easier to understand potential production problems.
Here are a few resources you could check to find a potential manufacturer:
thomasnet.com, makersrow.com, and mfg.com.
Pros 👍
- You can focus on the business side of things
- You can potentially be the first to market
- You have full control over branding
- Hopefully, you find a partner that creates high-quality products
Cons 👎
- Finding a good manufacturer can be difficult
- The costs can be high (e.g. higher quantity requirements)
- You need to make sure everything is produced on time
Dropship
Here is how dropshipping works:
- Your store receives an order
- You purchase the ordered product from the supplier
- The supplier sends the product directly to your customer
If you decide to dropship, you don’t need to keep any inventory and don’t need to handle the ordered product. Some well known and large online shops have started out by selling dropshipped products. Wayfair.com, a successful furniture online shop, is one example. In the last couple of years, dropshipping has boomed. There are US-based as well as overseas companies that offer products to dropship.
A couple of websites to find products to dropship are:
Dropshipping has also been made easier by shop extensions like Oberlo. You can add Oberlo directly to your Shopify store. This add-on helps you to find products, import those products directly to your online store, add the tracking numbers to your orders and much more.
Pros 👍
- You don’t have to carry any inventory
- You have lots of products to choose from
- It’s a cheap way to start
Cons 👎
- You’ll have less control over branding and packaging
- Shipping times are often very long if you work with overseas dropshippers
- Working with overseas dropshippers can be difficult (e.g. language barrier)
- Others can sell the exact same product
Source Existing Products
Another option to source a product is to talk to manufacturers in the US or overseas and resell their existing products. Ask the companies that carry products you like about their product catalogs and price lists. Some manufacturers even allow you to change small parts of the products, like the colors. You can also check if they can add your logo to the product, which is called white labeling. The manufacturer will most likely require you to order larger quantities and you’ll need to ship the product yourself or you can work with a third-party fulfillment company.
Pros 👍
- It’s easier to resell a product than to create it from scratch
- You have full control over branding
Cons 👎
- Competitors can potentially sell the same product
- Startup costs can be high
- You’ll need to carry inventory and think about shipping and order fulfillment
When it comes to sourcing your product, you have a couple of options: create the product all by yourself, with the help of a manufacturer, work with a dropshipper or resell an existing product. Each category has its pros and cons. Deciding which one is right for you depends largely on what kind of product you want to sell, the control you want to have over branding as well as how much you want to initially invest. In the end, don’t be intimidated by any of the above options. You can always first start off with one sourcing option and eventually transition to another category.
If you’re not sure what to actually sell, I wrote a guide on how to come up with a product idea to sell online. I hope it can give you some pointers to find a product you’re excited about.
