Retailing is one of the hardest hit industries in today’s recession. However, retailing plays an important role as one of the driving factors in economic recovery.
Whether you start your retail store off line, online, or both, you need to have a long list of products for sale, as retailing strength is in product variants.
However, the costs related to off line retailing are very high, these days. Today, the key word in retailing is bootstrap.
Probably the best way to bootstrap is by moving your retail store operation online.
Online retailing – that is, selling products through web stores – thrives. I have heard several success stories that involve closing retail stores and opeing web stores.
The best thing about web stores is no store set up costs and sales assistant salaries. Web stores can be accessed 24/7 – something that their off line counterpart can’t do.
The key in staying lean and, if possible, stock-less retailing is the different product sourcing of online retail stores compared to the conventional brick-and-mortar retail stores.
How to source for products
There are many options you can consider to source your products. Here are some of the options, with things to consider if you decided to choose one:
- Make your own product
On the upside, making your own product to sell is probably the most profitable of all – unique product lines always appeal customers. On the downside, however, not many can create outstanding and unique products to sell, so this is probably not ideal for most online retailers.
- Dropshipping
Thanks to eBay, dropshipping has becoming a mainstream in e-commerce. The good – Dropshipping is basically allowing you to process your orders without the need for you to have inventory whatsoever. The bad – Relatively high pricing of dropshippers will cut your profit margin considerably, compared to the regular wholesaling.
- Affiliate marketing
Affiliate marketing has been hot for years, and the right venue to go if you want to super-boostrap your online retail store. The plus, you don’t need any money to start – Joining network, such as Zlio.com allows you to open online retail store at no cost. The minus, competition is cut-throat.
- Wholesale purchasing
The most common of all, especially in off line retailing. Basically, you are given a certain amount of discount to purchase products in bulk, such as Wholesale Clothing. There are generally two types of wholesaler: small and large volume wholesaler – Small or light bulk wholesaler allows you order a small amount of items in bulk, while large volume wholesaler only allows you to order in a large amount of items, quite often container-full. The pro: High-margin profit for you. The con: You need a storage or warehouse ready.
- Product liquidation
Occasionally, wholesalers have excess inventory that need to be cleared of their warehouses at very-low prices. If you are serious about online retailing, securing a liquidation can make your online store very, very profitable. Just like the other bulk purchasing, the bad thing about this is the spaces needed to store the items.
How to bootstrap your product sourcing
You see, there are numerous ways to source for product.
If you want to start small and maximise your bootstrapping effort, I suggest you to try affiliate marketing and dropshipping. Both are usually can be done with minimal investment, even for free.
When you feel that your online retail store is growing well, you can budget from the profit to acquire more products at lower prices through wholesaling, starting from light bulk, moving up to liquidations.
Like everything in life, there is no easy money – you need to work your way up if you want to succeed in the online retailing game.
Remember, almost all entrepreneurs bootstrap their startup, including Michael Dell, Bill Gates, and the likes. Why don’t you bootstrap yours, too?
Ivan Widjaya
Bootstrap product sourcing
Image by normanack.