W03: Sourcing the Product

I have been a buyer/purchaser for a small chain of retail stores for over 15 years, so I didn't think I would have much to learn this week.  I was sure wrong about that!  I have a lot of experience going to trade shoes, working with vendors to negotiate the lowest possible pricing and free freight deals.  It helps when you are buying for multiple brick & mortar stores to get better quantity discounts and to have the space needed to handle inventory.  When buying for a brick and mortar store, I feel confident in my knowledge and ability to get make good buying decisions.

I have some limited experience with Alibaba and direct importing.  Utilizing Alibaba is great for getting lower prices without always having to buy deep in one single product.  The downside is the shipping time and there are typically shipping costs involved, depending on the supplier.  Alibaba is great when you have planned for a purchase and have the time to wait.  Direct importing is even better than Alibaba, but you typically have to buy deep and it can take several months to receive the product.  Direct importing is great if you are patient, are good at forecasting and confident you can sell through what you've bought.  

What I have no knowledge about is drop shipping or affiliate marketing.  I was familiar with the concept of drop shipping and had looked into a few options for the company I work for.  But ultimately my boss decided that it was too much of a hassle at the time and we dropped the idea.  Researching a few drop shipping options this week made me realize that it isn't as difficult as it has seemed to me in the past.  One thing that was always vague to me was how much it would cost to start.  I found a great step-by-step guide here on how to modestly budget for a drop shipping business.  I found this very helpful.  

I'm still a little bit a lot shaky on affiliate marketing!  I understand the basic concept but I still have a difficult time understanding exactly how it works and how one can actually make a revenue off of it.  My best guess is that the more well established your website is and the more of a customer base you have, the better suited you are to utilize affiliate marketing.  

I still have a lot to learn when it comes to starting an online business, but I feel like I really rounded out my purchasing knowledge this week.  I hope that I will be able to utilize that knowledge as I move forward this semester and later as I attempt to start a business of my own.