Product Sourcing: A New Merchant's Most Common Question

by Michael Sisler - Date: 2006-12-17 - Word Count: 671 Share This!

Well I was going through Our Ebay Group's Meet Up Message Board Posts since I had missed a couple of weeks of discussions in late October/early November. I saw that there was some big fiasco over the question where do I source my products and where do I find wholesalers or drop shippers. I remember when I started selling online and was totally clueless where to source my products although I didn't ask in the ebay forums as I saw newbie after newbie get insulted and ridiculed for daring to ask a seller such a question. Honestly these sources are really no big secret at all and if you follow simple logic on where to look it could be found in less than an hour.

For those of you who do not know I am an Authorized Distributor for The Colibri Group located in Cranston, RI as well as a distributor for two other smaller manufacturers. I am able to offer over 10,000 different products including Lighters, European Watches, European Jewelery, Elegant Clocks, etc. to my Retailers and Direct Consumers! I currently keep about $80,000-$120,000 of inventory and warehouse it in my office and apartment. For those of you that might not know another name for a Distributor is a Wholesaler however because of the abused usage of the term Wholesaler a lot of Wholesalers will call themselves distributors. The four main groups in a supply chain include the manufacturer who sells very large quantities to the wholesaler/distributor at the first sale rate who in turn sale to smaller retailers in bulk at a bulk discount based upon prediscussed terms who finally sale to the consumers usually at MSRP or somewhere close to it.

Now that you understand the business supply chain you probably ask where you need to look first for your product sources. The answer is simple you go to the source itself, the manufacturer. Now when I first started selling on ebay I didn't have the funds to open a direct account with a manufacturer nor did I have the trade references to prove my legitimacy. In order to become a distributor/wholesaler for a manufacturer you usually have to be able to purchase anywhere from $10,000-$100,000 of merchandise on your first order as well as be able to provide previous wholesalers as trade references to validate your business. If you can provide this data to your manufacturer the next step will usually involve you meeting with one of their Regional Sales Representatives to discuss your new relationship, minimums, and terms of sale.

If you are not able to satisfy the Manufacturers request the next step would be to ask the manufacturer to refer you to one of their authorized distributors in your area. The manufacturer will be happy to do this for you and you will have found your new product source. Now before we forget in order to buy wholesale in most circumstances you need to have a valid resaler license(business tax id). This doesn't usually cost money to obtain, in fact all you really need to do is to contact and meet with the comptrollers office in your area to fill out all the paperwork to receive your resaler certificate. Wholesalers like myself sale at lower minimums than the manufacturers that generally range from minimum orders of $100-$1000(wholesale value). You must meet these minimums to get a wholesale rate and the reason for this is the markup for the wholesale industry averages around 25% compared to 80-150% markup achieved by the retailer.

The example I just showed you is Honestly the best way to source new/(unused) products but other ways would include looking through the yellow pages for Business Listings or you can go to a common area in your city where wholesale distribution takes place such as Harry Hines in DFW. Used Goods or Collectibles can be sourced through flea markets, garage sales, and swap meets and are more commonly affiliated with Hobby Businesses. I hope this information helps answer some of the new entrepreneur's questions about product sourcing.

Related Tags: ebay, ecommerce, suppliers, wholesalers, product sourcing, distributors

Michael Sisler owner/distributor of MS Novelty Enterprises

MS Novelty Enterprises is a company specializing in the distribution of high-end novelty lighters and jewelry from The Colibri Group, Zippo Manufacturing Company, and LA Lighter. Michael is also an affiliate marketer and does website promotion and is a contributor to the Dallas Ebay Group on

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