Finding sources of products to sell and locating reliable suppliers may seem like daunting tasks. Although product sourcing is a large subject and may seem difficult to understand, it is actually easier to grasp than it may first appear. It helps to understand that sources for products are practically unlimited, but once you figure out what it is you want to sell and who your buyers are, you have actually narrowed down your choices. For this to make sense, it is important to familiarize yourself with some of the basic product sources available to online retailers.

Trade Shows As an ecommerce merchant, one of your most potentially valuable resources are trade shows. Trade shows are essentially exhibitions where distributors and manufacturers present the product lines available for sale. Such exhibitions allow distributors and retailers to network. For distributor, it means finding potential retail outlets, and for merchants, it means finding viable new sources of hot products. Trade shows are held in cities and towns all over the United States, Europe, and Asia. For those of you in the U.S., it is not difficult to locate trade exhibitions near you, and often your local chamber of commerce can provide you with a schedule of events for your area. Some Internet resources that can help include the following websites: Tradeshowweek.com, Tsnn.com, and biztradeshows.com.

Wholesale Distributors Wholesale distributors are a standard resource for any retailer of physical products whether they engage in online, retail ecommerce or brick and mortar storefront sales. Wholesalers are the authorized distributors for manufactured products and are the next step in the flow of manufactured goods to the retail market. Wholesalers are responsible for warehousing their product lines and are in charge of all phases of getting products from the warehouse to their retail customers (meaning you, the merchant). That means they handle shipping and handling and any other needed transportation to get the product to destination as well as order tracking, and in some cases even returns. The wholesaler also handles sales and is responsible for the sales force needed to put its products into the hands of retailers. In order to purchase from a true wholesaler, you must have a sales tax permit, sometimes called a resale certificate, which is granted by your state department of revenue. This is often free of charge. This allows you to purchase wholesale goods without paying sales tax. A true wholesaler must always demand proof of your sales tax permit, and having such a permit is often the minimum requirement you need to prove that you are a real business. The Internet is not always the best place to find true wholesalers because it is not important to their business, but you might try gowholesale.com and proproductsourcing.com leads and tips on supply sources.

Liquidation-Close Out Another source of low-cost goods comes from retail liquidations and closeouts. Liquidated retail goods are generally either new or good-as-new off market products; it is not unusual to find brand names at low cost. However, the key to cheap closeout items is buying in bulk, and you generally cannot get liquidated stock unless you buy in bulk lots. This is sometimes a problem for small online sites because they may not be able to afford to buy goods by the truckload. Usually you can purchase by the pallet and less frequently is smaller lot quantities. Some of the better known online liquidation specialists are liquidation.com, viatrading.com, and worldliquidators.net, and rhinomart.com. However, you will find many if you do a Google search under, “liquidation closeout wholesale.” Even if you plan on selling new items, consider adding liquidation stock into the mix to increase your bottom line.

Auctions Another source of low-cost goods is auctions, both online and off. Although many people leverage eBay for this purpose, as a source of cheap goods to resell on eBay, traditional auctions can be a goldmine. Other examples of offline auctions would include government auctions, police auctions, estate sales, foreclosure auctions, and storage unit auctions. Whether or not auctions will work for you depends on your business model, but this could be a way to add inventory to your site at little additional cost. Auctions have long been an eBay seller secret for products to resell on eBay or other online venues. There are many online resources to help find auctions taking place all over the U.S., and you might the following helpful: auctionzip.com, auction.com, and farmauctionguide.com. For auctions of government property, try govsales.gov.

Establishing Your Business If you are serious about your ecommerce business, it is important that you actually establish yourself as a real business, which means meeting certain legal requirements. This does not have to be complicated, but it does mean doing a little research to understand the minimum requirements for legality in your local area. If you are essentially a single person, you are able to run your business as a sole proprietorship. Although many people rotely recommend incorporation, it may not be necessary, and I would advise consulting a business attorney to discuss the best form and structure for your business and necessary tax obligations. You will need to find out if you need a business license (probably not if you are doing business solely over the Internet), and you may also want to register a DBA (Doing Business As . . .), in order to legally do business under an assumed name in your local area.

Further, as a retail merchant you will need a sales tax permit in order to set up accounts with and purchase goods from wholesale distributors. The sales tax permit is essential to prove you are legitimate. It is helpful, though not always necessary, to have a bank account in your business name and/or a credit card in your business name. This helps demonstrate your legitimacy as a business. However, more important than a mere bank account is your ability to prove you can pay. In my own experience, I have found that a sales tax permit and proof of ability to pay generally satisfy most wholesalers.

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