How Do You Source Products for an Online Business?

Online Business - Dropshipping

There are more online eCommerce businesses than ever before. The growth of integrated platforms like Shopify among others has simplified the process to start a business, accept payments, and market to customers.

It can be free or cost very little to set up an eCommerce business until it’s time to source products. When you’re sourcing products, you have a wide variety of options available to you according to David Zheng, writing for Wise Merchant. For example, you might make your product, or you may use a manufacturer. Other options include using a wholesaler or going the dropshipping route.

The following are some general strategies and things to keep in mind when it comes to sourcing products for the online business you’re working to build.

Strategies for sourcing products for the online business:

Doing It Yourself

One option that wasn’t mentioned above is going the DIY route for your products. Plenty of people create their own products to sell online and there is a market for these items, as is evidenced by the popularity of Etsy. However, there are pitfalls and things to think about with the DIY product sourcing method.

For example, how much money will you have to put into each item, as well as how much time?

Are you really going to be profitable if this is the option you choose? What about storing your materials and how will you set a timeline for your customers when they order custom items?

Unless you have a very specialized talent or you’re more interested in making items that are hugely profitable, it’s probably better to source your products from somewhere else.

Manufacturers and Wholesalers

The most common way to source products to sell online is through manufacturers or wholesalers. You might work with a manufacturer to create your own product. You could also take an existing product and brand it with your business. Wholesalers provide bulk orders of items that you can then mark up and resell for a profit.

There are advantages to going the route of manufacturers and wholesalers. First, you can develop or source unique products that can differentiate you from the competition. You have a fair amount of control over your brand and things like shipping time as well because you’re the one shipping items out.

There are also downsides. You will have to store your inventory, and you’re going to have to pay for items upfront with no guarantee they’ll sell. This is going to require a financial investment that some new online business owners aren’t equipped to take on.

If you are going to go with a manufacturer or wholesale, keep a few things in mind. First, you need to do your research and read reviews before you send money to anyone. There are a lot of great companies out there, but also a lot particularly from overseas, that don’t have high-quality items.

If you’ve ordered products from overseas, you should also count on the fact that it’s going to take weeks or even longer for your items to arrive in the States.

If you find a manufacturer or wholesaler you’d like to work with, request samples before you agree to anything.


Dropshipping is a very popular way to source products. Sites like Shopify offer third-party integrations with dropshipping suppliers. These companies will often serve as a link between manufacturers, wholesalers or designers, and people who will sell their products on their own websites.

With drop shipping, you choose the items you want to offer on your site. You then create product descriptions and everything else potential buyers will need to know about the products. If someone makes a purchase from you, you order the product from the drop shipper, and you pay them.

You’re usually charging a fairly significant markup on your own site, so the difference between what the customer pays you and what you pay for the item is your profit.

A lot of drop shippers don’t require you to have your hands on the products you’re selling at all. When you place an order, you can give them the customer’s information, and they’ll ship it directly to that person.

There are pitfalls that come with dropshipping, like any other method of sourcing products. One of the biggest is that you have no control over your customer’s experience. You aren’t the one controlling shipping, and you can’t do quality control because you don’t even see the products in most cases.

These aren’t the only product sourcing approaches or strategies, but they are some of the biggest used by many online businesses, and they can give you a starting point.

Scroll to Top