Where to Find Suppliers for Your E-commerce Business
Are you looking to start an e-commerce business but don't know where to find suppliers for your products? Look no further! In this article, we'll cover everything you need to know about finding suppliers in the United States and Asia, including the pros and cons of each option, how to calculate your true landed cost of goods, and where to find vendors online and in person.
Understanding Your E-commerce Business Model
Before you start looking for suppliers, it's important to understand your e-commerce business model. Depending on whether you're dropshipping, selling private label or branded products, or selling other people's products, you'll need to find different types of suppliers.
- Dropshipping: If you're dropshipping, you'll want to look for dropship suppliers who will ship products directly to your customers.
- Private Label or Branded Products: If you're selling private label or branded products, you'll want to look for factories and manufacturers who can produce your products to your specifications.
- Wholesale: If you're selling other people's products, you'll need to find wholesale suppliers who can sell you products in bulk at a discounted price.
Factors to Consider When Choosing a Supplier
When choosing a supplier, there are several factors to consider, including your budget, risk tolerance, and the type and nature of the product you're selling.
- Budget: Your budget will determine the type of supplier you can afford. If you have less than $100 to spend on your online store, you'll be limited to dropship wholesalers. If you have between $100 to $1,000 to spend, you'll be limited to domestic wholesale. If you have over $3,000 to invest in your e-commerce store, we highly recommend private labeling your own branded products.
- Risk Tolerance: Your risk tolerance will determine the level of risk you're willing to take on when sourcing products. Some suppliers will require you to buy thousands of units upfront, while others will be willing to sell you product in single unit quantities.
- Type and Nature of Product: The type and nature of the product you're selling will also influence your sourcing strategy. If the product is complex, you may want to source from the United States instead of China. If there are high tariffs or customs duties, you may want to source from the United States as well. If the product is heavy or expensive to ship, that may also influence your sourcing strategy.
Pros and Cons of Sourcing from Asia
There's a lot of information out there that says sourcing from China is the way to go, but is it really? Let's take a look at the pros and cons of sourcing from Asia.
Pros
- Lower Cost: In general, sourcing from Asia will be less expensive because the cost of labor in China and other Asian countries is significantly cheaper.
- High Amount of Labor: Products that require a high amount of labor, such as clothing or anything that requires woodworking, sewing, stitching, assembly, or packaging, will tend to be cheaper if you source from China.
Cons
- Language Barrier: If you source from a Chinese supplier, you'll likely have to deal with a language barrier. While there will always be someone who can speak and write English, there will be cultural differences that you must understand and adapt to.
- Import Duties: You'll have to pay import duties on your goods, which can significantly increase your true landed cost of goods.
- High Cost of Shipping: Shipping from China can be expensive, and you'll likely have to hire a freight forwarder and a customs broker to clear customs.
- Long Lead Times: Manufacturing can take upwards of 2 to 4 months to get product in-house, and communication problems can arise due to the time difference between the US and China.
Pros and Cons of Sourcing from the United States
Sourcing from the United States has its own set of pros and cons. Let's take a look.
Pros
- Faster Shipping: Shipping from the United States will be faster than shipping from China, which can be important if you need to get products to your customers quickly.
- No Language Barrier: There won't be a language barrier if you source from the United States, which can make communication easier.
- No Import Duties: You won't have to pay import duties on your goods if you source from the United States.
- Lower Shipping Costs: Shipping costs will be lower if you source from the United States, which can significantly reduce your true landed cost of goods.
Cons
- Higher Cost: In general, sourcing from the United States will be more expensive because the cost of labor is higher.
- Limited Selection: There may be a limited selection of suppliers in the United States, depending on the type of product you're selling.
Where to Find Vendors
Now that you understand the pros and cons of sourcing from Asia and the United States, let's take a look at where to find vendors.
Asia
- Alibaba: Alibaba is a directory of all the Chinese and Asian vendors that you can search through. It's probably the easiest place to find Chinese vendors online.
- Global Sources: Global Sources is very similar to Alibaba in that it is a search engine for Chinese suppliers. The main difference is that Global Sources tends to have larger factories in their directory, and as a result, your minimum order quantities will tend to be higher on Global Sources.
- Trade Shows: There are a number of trade shows in China that you can attend, including the Canton Fair and the Global Source Summit.
United States
- Data Axle (formerly Reference USA): Data Axle is a directory of every single business in the United States. You can access it for free at your local library.
- Worldwide Brands: Worldwide Brands is a directory of dropship and light bulk wholesale suppliers in the United States.
- Thomasnet: Thomasnet is a directory of suppliers in the United States who can help you fabricate your products from scratch.
- Trade Shows: There are a number of trade shows in the United States that you can attend, including those listed on Wholesale Central.
Calculating Your True Landed Cost of Goods
When sourcing products, it's important to calculate your true landed cost of goods. This includes the cost of the product, shipping, and any import duties or taxes you'll have to pay. To calculate your true landed cost of goods, you can use an import duty calculator and a landed cost calculator.
Conclusion
Sourcing products for your e-commerce business can be a daunting task, but with the right information and resources, it doesn't have to be. By understanding your e-commerce business model, considering the factors that influence your sourcing strategy, and knowing where to find vendors, you can find the right suppliers for your products and grow your business.
