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5 Ways to Source Products for Your Boutique

May 27, 2021 09:12

5 Ways to Source Products for Your Boutique

5 Ways to Source Products for Your Boutique

 

So you’re thinking of starting a boutique?

 

Amazing! We’re so psyched for you. Starting your own retail business can be such a rewarding, and fulfilling experience. (Not to mention one with high earning potential and loads of freedom!)

 

As you work on building your boutique, you have a lot of decisions ahead of you.

 

You’ll have to choose what you’ll name your boutique, who you’ll sell to, how you’ll get the word out about your products, and… oh yeah! Where you’ll get your fabulous products from anyway!

 

Starting a boutique has never been easier. There’s more opportunity than ever before, with the ability to source products from anywhere in the world and sell them anywhere. 

 

But all of those options can get a bit overwhelming, especially if you’ve never started a business like this before! The product sourcing strategy you use will have a MAJOR impact on your business and your bottom line. It’ll affect your margins, your level of risk, the quality of your products, your ability to scale, your brand, and so much more.

 

While there are many different ways of sourcing products for your boutique, the five most common ways are:

 

  • Drop-shipping
  • MLM selling
  • Buying from a traditional wholesaler
  • Buying wholesale from established brands
  • Buying factory-direct wholesale boutique items

 

While businesses that operate these ways may look very similar on the outside, their entire business strategy is totally different depending on how they source their products.

 

Let’s dive deep into these 5 product sourcing strategies and how they can shape your boutique so you can make the best decision for your business.

 

women getting box that is happy

Methods to Source Your Products

Product Sourcing Method #1: Drop-shipping

Drop-shipping is a product sourcing method where an online store sells products without actually carrying them in stock. 

 

Retailers who drop-ship work directly with manufacturers or distributors to sell products. Basically, the manufacturer or distributor provides the inventory, the retailer (you!) finds customers to buy that inventory, and then the distributor ships the inventory to your customers upon purchase.

 

Drop-shipping is an attractive product sourcing method because it involves very low up-front costs. Rather than having to purchase all of your inventory outright before selling it, you only pay for the items after they sell. Your customers pay the retail price you set, you pay the suppliers’ wholesale price with the money you make from the sale, and whatever’s leftover is your profit. Drop-shipping also gives you less control (and less responsibility) over the entire fulfillment process, for better or for worse.

 

Pros of Drop-Shipping:

  • You don’t have to worry about fulfillment. Your supplier will take care of packaging and shipping orders.
  • Lower up-front costs. No need to purchase inventory before making a sale.
  • Sell from anywhere. Don’t worry about finding a warehouse for all of the items you sell – your supplier will house all inventory.

 

Cons of Drop-Shipping:

  • Lower margins. Drop-shipping typically offers much thinner margins than you’ll get from buying wholesale.
  • Low success rate. Almost 90% of drop-shippers fail during their first month.
  • Very competitive. Low startup costs mean the drop-shipping landscape is very saturated.
  • Subject to shipping/supplier errors. You’ll be responsible for any fulfillment or shipping errors, even if you had nothing to do with them.

 

Try this product sourcing method if…

You want to start a low-risk online store with lower up-front costs, and you’re okay with relying on a manufacturer to handle fulfillment and quality concerns.

 

Learn more about drop-shipping and how it compares to buying wholesale here.

 

Product Sourcing Method #2: MLM Selling

MLM selling or multi-level marketing selling is a product sourcing method where you join with a direct sales company to sell their products. MLM sellers pay a set fee to become a distributor, sign up under a different distributor, then pay fixed wholesale prices for branded inventory to sell at a markup.

 

MLM sellers earn commission by selling products, but that’s not the only way to make money. In MLMs, distributors also earn commission from sales and recruits generated from every person they sign up as a distributor, continuing down for multiple levels. (That’s where the name “multi-level marketing” comes from.) This means that people who sign a lot of distributors up after them often make very large amounts of passive income.

 

Pros of MLM selling:

  • Easy to get started. MLM selling doesn’t require you to start your own business and involves a lot of support.
  • Multiple ways of generating income. You can earn money in commission from the items you sell AND earn money in commission for sales generated by other distributors in your downline.
  • Existing market. Since you sell branded products as a distributor for the company, you may find that people out there are already familiar with the products you sell and interested in buying them.

 

Cons of MLM selling:

  • Up-front costs. Most MLMs require you to pay a set fee to become a distributor and purchase a starter kit, which could cost anywhere from $50 to $5000.
  • Very competitive. The emphasis on recruiting means you’re actively recruiting your own competitors, making the circle of who to sell to shrink smaller and smaller.
  • Less freedom. Rather than owning your own business, selling for an MLM means you work as a distributor for a particular company, meaning you’re subject to their policies, pricing schemes, and product selection.
  • Low success rate. The FTC has found that 99% of MLM participants actually lose money.

 

Try this method if…

You have a really large network, you’re social media savvy, and you genuinely love and believe in an MLM company’s products.

 

Learn more about MLM selling and how it compares to retail selling here.

 

Product Sourcing Method #3: Buying from a Traditional Wholesaler

Buying wholesale is a more traditional retail method. In this product sourcing model, retailers purchase inventory from a supplier at a discounted (or wholesale) rate. Then, they sell that inventory directly to customers at a marked-up retail price of their choosing.

 

Traditional wholesalers essentially act as middlemen between manufacturers or factories and retailers. Wholesalers purchase inventory from a manufacturer at a factory-direct price, then sell that same inventory to retailers at a marked-up wholesale price. Then, retailers purchase that inventory, mark that price up again, and sell those products to customers. When a customer makes a purchase, the retailer ships that inventory directly to them.

 

Wholesale costs vary a lot from supplier to supplier – contrary to popular belief, “wholesale” doesn’t automatically mean you’re getting the best price. But a good wholesale supplier will offer competitive wholesale prices and better margins than you may get from a different product sourcing method. They’ll also offer a wide selection of products to choose from.

 

Pros of Buying from a Traditional Wholesaler:

  • Good margins. If you buy wholesale inventory, you’ll typically earn more money per sale than you would drop-shipping or selling MLM products.
  • More control. You’ll have the power to dictate your business strategy, fulfillment practices, product selection, customer service policies, etc.
  • Freedom to customize. Since you’ll be purchasing and shipping out your own inventory, you can customize your packaging and products if you wish.
  • Sell online or in-person. When you have the products on hand, you can sell them online or in pop-up shops whenever the opportunity arises.

 

Cons of Buying from a Traditional Wholesaler:

  • Higher startup costs. You’ll have to purchase all of your inventory upfront, so make sure you have money set aside to invest in your business before you actually start making any money. (Plus, traditional wholesalers may charge a higher price per item than other product sourcing methods offer, or require large minimum order quantities.)
  • Less flexible location. You’ll need a place to house all of your inventory, whether it’s a warehouse or the back corner of your closet.
  • Fulfill your own orders. You’ll be in charge of packaging, shipping, and fulfillment.
  • More risk. If you place an order for 500 pairs of shoes and only sell 5, you’ll have to figure out what to do with that excess inventory and how to make up the cash you invested in it.
  • Language barriers. You’ll have to work with internationally based companies, which can cause all sorts of headache when dealing with communications


 

Try this method if…

You want to go with a tried and true product sourcing method, and you have plenty of $$ to invest in inventory up-front.

 

Product Sourcing Method #4: Buying Wholesale from Brands

Marketing can be one of the trickiest parts of operating any business. One way to make that aspect easier is to sell products that are already in high demand. 

 

Many brands allow retailers to purchase their existing products at a wholesale rate. Typically, they’ll require you to have a business license and hit a minimum order threshold to be able to purchase products at that rate. Some brands will have a page dedicated to wholesale buyers, while others may require you to send an email inquiring about wholesale opportunities for more information.

 

Pros of Buying Wholesale from Brands:

  • Higher demand. Many brand-name items already have people searching for them. If you sell name-brand items on Amazon or at a lower price than available elsewhere, you could see a lot of success.
  • Good margins. You’ll typically earn more money per sale than you would drop-shipping or selling MLM products.
  • Sell online or in-person. When you have your products on hand, you can sell them online or at a brick-and-mortar boutique.

 

Cons of Buying Wholesale from Brands

  • Competitive. When you’re selling name-brand products, you’re competing with other larger-scale retailers… as well as the brand itself, with all their marketing resources.
  • Higher startup costs. You’ll have to purchase your wholesale inventory up-front, so make sure you have money set aside to invest. Many brands also require large minimum order quantities that can be difficult for new or small businesses to meet.
  • Fulfill your own orders. You’ll be in charge of shipping and fulfillment.
  • Difficult to coordinate. Rather than purchasing all of your wholesale goods from one marketplace or seller, you’ll only be able to order products from the one brand you’re working with at a time. It can also be tricky to set the initial wholesale buying process up.

 

Try this method if…

You’re planning on selling on Amazon, or you’ve found branded products that you think would make an excellent addition to your existing product selection.

 

two women in store looking at wholesale inventory

Product Sourcing Method #5: Buying Factory-Direct Wholesale Boutique Items

This method is very similar to buying from a traditional wholesaler, but the pricing model is a bit different.

 

Traditional wholesalers purchase inventory from factories, then sell that same inventory to retailers at a wholesale markup. 

 

Factory-direct wholesale marketplaces like Supplied partner with thousands of factories worldwide to offer inventory directly from manufacturers, without that pesky wholesale markup that would usually eat into your margins.

 

Essentially, Supplied allows you to access hundreds of thousands of items at factory-direct prices in one convenient place.

 

Buying factory-direct wholesale boutique items offers all of the same benefits of buying from a traditional wholesaler at a much lower price – up to 75% off of wholesale prices you might see elsewhere.

 

Pros of Buying Factory-Direct Wholesale Boutique Items:

  • Work with one vendor. With Supplied, they connect with the factories for you, so you can access thousands of vendors at once.
  • Wide selection. Supplied offers a selection of over 250,000+ wholesale boutique items in one convenient online marketplace.
  • No MOQs. Most wholesalers have strict minimum order quantities you’ll need to meet to get the lowest price – Supplied has no MOQs, meaning you can order just one item and still get factory-direct pricing.
  • Sell online or in-person. When you have the products on hand, you can sell them online or in pop-up shops whenever the opportunity arises.
  • Buyer protection guaranteed. With buyer protection, there is no need to worry about customs issues or getting ripped off by a factory. 

 

Cons of Buying from a Traditional Wholesaler:

  • Up-front costs. You’ll have to purchase all of your inventory up-front, so make sure you have money set aside to invest in your business before you actually start making any money. (Though Supplied does offer flexible payment options, allowing you to break up your inventory order into multiple payments if you’d prefer.)
  • Less flexible location. You’ll need a place to house all of your inventory, whether it’s a warehouse or the back corner of your closet.
  • Fulfill your own orders. You’ll be in charge of packaging, shipping, and fulfillment.

 

Try this method if…

You want to get the best margins available without having to invest a ton of $$ into your first inventory order, and you’re looking for a wide selection of on-trend boutique items in one convenient place.


 

women on couch smiling at phone

How Should I Source Products for My Boutique?

The best method of sourcing products for your boutique depends on your business strategy and your goals. 

 

If you are highly tech-savvy and have little to no money to invest in your boutique up-front, drop-shipping could be worth looking into.

 

If you’re planning on selling on Amazon or a similar marketplace and want to sell products that are already in high demand, buying wholesale from existing brands might be a good idea.

 

But in most situations, factory-direct is the way to go. You’ll get the lowest wholesale prices, the highest margins, and the widest selection of products that way, with excellent customer support. It’s a great way to start building a unique, branded boutique. 

 

If you’re interested in purchasing factory-direct wholesale boutique items for your boutique, start shopping Supplied here.

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