Expanding one’s product range has numerous strategic benefits to a business. For one, you can expand your reach to a different market. By doing so, you’re essentially opening another source of revenue.
Moreover, since customers are more likely to come back to purchase all sorts of products, their loyalty will slowly increase. In other words, not only can it increase your sales, but expanding your product range may also grow your visibility and customer loyalty. But of course, this venture comes with challenges.
For starters, you first have to know what products your customers would like to see from your brand. It’s also crucial to test that product on the market before offering it as one of yours. Most importantly, you have to figure out how to source the products, which is why you’re here.
If you’re struggling to devise a sourcing strategy, here are four options you can consider from the get-go:
1. Online arbitrage
Online arbitrage is a sourcing strategy where you purchase items at a low price from one marketplace and selling it at a higher price on a different marketplace. There are several perks to this methodology.
- One, you don’t have to spend a lot to expand your product range, as opposed to other strategies.
- Two, you don’t have to advertise the item, considering how the marketplace is most likely already promoting the product.
- Lastly, if the venture fails, it won’t affect your business’ reputation that much since the product doesn’t come from your brand.
As always, there are disadvantages, too. Perhaps the most significant disadvantage to this sourcing option is that you’ll have numerous competitors. This is especially true if you’re sourcing a relatively popular item. You also have to deal with fees that marketplaces charge on items, so your revenue for each item is already a few bucks less.
Wholesalers are individuals or organizations that sell products in large quantities but at a low price. If you’re planning on sourcing products by purchasing from wholesalers, the process would be similar to online arbitrage. This option is typically more affordable than online arbitrage, but since you’re required to source products in bulk, it’s not ideal if you currently have low sales activity or if your budget is in a tight spot. Just like with online arbitrage, it’s likely that the competition would be fairly tight.
On the bright side, there are countless wholesalers out there, so finding the right one to source your product won’t be much of a problem. Sourcing your product this way also allows you to build a relationship with the wholesaler, which brings its own set of benefits.
Manufacturers are yet another excellent sourcing option, especially if you value profit among anything else. By working with a manufacturer, there’ll be no need for a middleman that charges fees, unlike the previous option. Hence, the total price is typically lower than other options. Furthermore, since there’s no intermediary–it’s just you and the manufacturer–the whole transaction would go a lot faster and smoother.
It’s also a great way to establish a relationship with the manufacturing company, which can help you in the long run. For one, since you can work closely with their company, you’ll be able to influence their decisions with your advice. If they’re struggling to acquire new clients, for example, you can encourage them to lower their prices or increase the quality of their items.
During your stay on the internet, you’ve probably seen numerous handicrafts that you’d like to have in your collection. The good news is that you’re not the only one thinking the same. There are a lot of people that want to purchase handicrafts or DIY items from artisans. If you’re thinking of expanding your product range, sourcing from these artisans would be a great idea and for several reasons.
One, no one else would be selling the same product as you. Two, if ever the product pops off, you can monopolize the market for a while, at least until another brand starts creating similar products.
The only problem you’ll encounter when sourcing products from artisans would be that their production speed is significantly lower than other sourcing options. Still, the product quality makes up for it, so it remains one of the best sourcing options available.
There are many other sourcing options apart from these four, but if your main goal is to expand your product range, these are the most suitable methods there are. But remember, choosing a sourcing option is just one part of the process. There are many other things you must do, such as analyzing customer data, expanding channels, and the likes.