Locating products to sell

There are plenty of websites where you can browse products to start your online store. You can also visit trade shows (which are expos or conventions where suppliers of products will exhibit in booths, and potential customers can visit and browse their products and place orders). However, with travel restrictions resulting from the COVID-19 pandemic, you can expect to see an even bigger swing towards using websites to source products, so I’m going to focus on digital platforms for sourcing products.

Here are three of my favorite digital platforms for sourcing new products, in my order of preference:

1. Alibaba.com
2. Made-in-China.com
3. Etsy.com/market/wholesale

Using any of these three websites, the principles of sourcing products are the same. You simply search for the product you are interested in and apply any filters that are relevant.

Imagine you want to sell beach towels from Turkey. If you’re using Alibaba, you navigate to the top of the homepage — where you will see a search bar. Simply type in ‘Turkish beach towels’, click on the search button and hey presto — you’re looking at your first potential products! You can then apply filters from the left-hand side of the screen, such as the preferred country of your manufacturer, your minimum order range or your target price (most suppliers operate in a similar way, but each website differs slightly). Start browsing the available products, and when you find a few you like you can call, email or live chat with your potential new supplier.

Try and work with trusted suppliers who have been on the platform for three or more years, and always review their feedback or customer ratings.

Supply and demand: Tools to check for trending products

The concept of supply and demand is a simple one, however you may be surprised at how often it’s not considered during new product launches. Put simply, supply is the products you provide, in a certain quantity, to match the demand — the interest in your products from consumers. Ideally, you want to match supply to demand so you can maximize profits and minimize spend. When I say minimize spend, I mean that you don’t want to be outlaying capital (your initial cash outlay) on stock that isn’t going to move or that will sell slowly. You need to find the balance of the right product, at the right time, in the right quantity.

There’s an age-old debate and tension between creative types and numbers types, with the creatives wanting products that are aspirational and match the vision and the aesthetic of the business, while the number-bods want products that are trending, are commercial and have a high sell-through. There is of course, a happy marriage to be found between the two, and your job is to find it.

When you think of how people search for products online, you probably think primarily of Google or Amazon. Imagine if you could collate the search data of millions of people all over the world to get an insight into what they are actually looking for! Well, the good news is you can.

Data-led buying is a strategy you can use to find out what people are actually looking for by scraping various pieces of data from a variety of sources. Don’t worry, I’m not about to get the tarot cards out or show you how to read minds — thankfully, tools are available to help you figure out what people want to buy.

One such tool is Google Trends. Go ahead and type trends.google.com into your browser — this will show you the current trending topics, in terms of what people are using Google to search for (Googling) in different countries. If I do this today, the example Google Trends shows me is Kim Kardashian and Taylor Swift.

While celebrity stories may be interesting, you will not find them particularly useful for your product research. You primarily want to see if your product idea rises or declines in popularity, in terms of trending searches, so you can check the validity of your product idea. You can also use these tools before you have a product in mind to give you ideas around what you can sell on your online Shopify store.

You want to be an early mover and catch the product wave when its growth trajectory is just starting, not when it’s near the top or coming down. Early mover advantage is a core business principle and puts you at a competitive advantage over new entrants to the market.

If I search for ‘smart watches’, the search volume shows an upward trend (see Figure 3-1), so I know this is a product that people are actively searching for on Google. A graph trending up equals increasing demand that you can expect to organically boost your sales.

Conversely, if I type the word ‘DVD’ (see Figure 3-2), the search volume appears to be in steady decline (although there is an interesting bump at around Christmas, which probably indicates that DVDs are still a Christmas present for some). It’s safe to say that DVDs show decreasing demand. If I were weighing up selling one of these two products, smart watches are by the far the more lucrative in terms of matching a product to demand.

You can also use Google Trends to compare products over time, if you want to see one product pitched against another. Similarly, you can search for topics; for instance, you may want to create something in the field of environmentally sustainable products. If you find a trending topic, you can then play around with products in that field to see if any are trending. It’s a little like going down a rabbit hole, but it’s a lot of fun and can be incredibly useful.

The homepage of Amazon is also really useful, as it will generally fill the homepage with ‘Trending Products’ and ‘Top Sellers’. If you stick to these two websites, you’re likely to get some good ideas flowing! Checking Amazon at the time of writing, the trending products include Apple AirPods, a Wi-Fi Extender, a Nintendo Switch and a Lamaze Peek-A-Boo book for children. If that’s too generic and you want to check what’s trending across a particular category — for instance, if you have decided that your online store is going to be based around pet supplies — then you can click on any of the trending products on the Amazon home page and then scroll through the filter on the left-hand menu, until you find ‘pet supplies’, which you can click through to. By following that path, I find cat litter, poop bags, scent-removing spray and a roller hair remover listed.

Alibaba provides much of the same, although more from a bulk ordering, or business to business (B2B), perspective, which of course is still useful (I talk about B2B and other sales channels in the section ‘Introducing Online Sales Channels’). For example, if I navigate to the ‘Top Ranking Products’ section and narrow this down to ‘Sports and Entertainment’, the top products are bicycles, fishing lines, baseball bats and plastic jump ropes. The great part about researching trending products on Alibaba is that you can then connect with the leading manufacturers of those products and commence the product sourcing process.

If you want to have any sort of commercial scale to your online business, you need to dive deeply into your product research, unless you are one of the very, very, very few who manage to master a niche that few others can — for example, perhaps you have a unique set of skills that means you can craft a certain kind of in-demand product yourself, such as custom-made surf boards. That’s great, but if you’re a generic brand aiming to sell printed t-shirts then you’re joining a long queue, because it’s busy inside that category unless you can stand out.

Avoid the temptation to believe that charm alone will drive your success — it plays a part in the story and the content, but your online business will be driven by great products. Uncover a great product, and you’ve made an amazing start to your journey towards ecommerce success.

Checking trending products in Shopify

Shopify provides great data on what products are trending on Shopify — and given the number of products it has listed, it’s no surprise that you can do much of your trending product research on Shopify directly!

Here’s a list of Shopify’s ‘Trending Products To Sell’ from early in 2021:

1. Peel-off face masks
2. Nail polish
3. Exercise bands
4. Water bottles
5. Blankets
6. Yoga and Pilates mats
7. Kayak accessories
8. Jigsaw puzzles
9. Kitchen and dining room furniture
10. Rugs
11. Board games
12. Laptop skins

Visit shopify.com/blog/trending-products to check what is trending on the platform and to help generate new product ideas.

D2C: Direct to consumer sales

This is probably what springs to mind when you think of a typical ecommerce business — and it’s probably what you’ve signed up to do using Shopify. Direct to consumer (D2C) sales are when a brand or manufacturer sells items directly to consumers without the need for an intermediary (like a wholesale or retail store). D2C sales can be applicable across a whole range of industries, whether it be a winery selling wines online without going through the local liquor store, or your favorite fashion brand starting a website and taking customer orders, rather than, or in addition to, stocking retail stores.

Many early online shoppers favored online shopping for the perception that there were discounts to be had thanks to businesses cutting out the person in the middle, who needed to make a share of the profits. Going direct to customers allowed manufacturers to reduce their retail prices, rather than having to cut in the wholesalers.

Platforms like Amazon and Alibaba are examples of online marketplaces where manufacturers can engage in D2C sales by creating their own stores on the marketplace and listing their products so that customers can place orders directly with them. In many cases, selling online via D2C channels has opened up a huge new revenue stream for manufacturers who were previously focused on B2B (business to business) revenue.

D2C channels have put a lot of strain on the traditional wholesale customers of manufacturers, as often they can end up competing against one another. I’ve seen this happen to a business I was involved with. We had placed a large order of men’s footwear, only to see that our manufacturer had also listed the same styles on Alibaba at half the price we were selling them for. Pricing rules and other agreements and restrictions are sometimes agreed upon to ensure that manufacturers don’t undercut their wholesale customers. On the flip side, a lot of wholesalers have gone further upstream or become more vertical and explored creating their own brands or manufacturing plants as a way to enjoy D2C benefits. Going vertical (or upstream) is essentially going back up the supply chain to source your product. If you’re a retailer buying from a wholesaler, you may decide to skip the wholesaler and try and go directly to the manufacturer.

B2C: Business to Consumer sales

Business to consumer (B2C) sales are when businesses that are not manufacturers, like Walmart, stock multiple brands to sell on to consumers. The business is not manufacturing the goods themselves but buying them from manufacturers, before on-selling them to consumers.

Shopify powers many of these sites around the world. Shopify is not concerned with how the product is sourced, or whether or not an online retailer manufactures their own products or buys them, as its purpose is to display content and help you sell it.

In an online context, think of websites like Revolve, Zalora, The Iconic, or the digital versions of retailers like the afore-mentioned Walmart. Most of these kinds of businesses are likely to have their own private labels as well; in other words, labels or brands that they have created, where they source its products from a manufacturer to increase the profit margin.

One of the criticisms of larger B2C businesses is that they use the sales data from the brands they stock to then go and copy their products to sell themselves. They may then use their significant buying power to get discounts from the manufacturers of the copied products, which allows them to undercut the original brand they stocked. If this happens to your own manufactured products, you need to regain control, put an end to the business relationship and rethink your strategy, or shift more towards selling online only rather than stocking other businesses.

Typically, a B2C online store carries desirable brands, which is often a method to attract customers to their online store, at potentially a lower cost, as customers are actively seeking the brands. If you are contemplating starting your own brand, you may have to work a little harder or spend a little more money to bring traffic to your store and alert people to who you are. (My book Selling Online For Dummies talks more about the pros and cons of creating your own brand versus stocking existing brands.)

A common mistake that many new online retailers make is to think that once your online store is open, there will be a natural procession of customers waiting for your virtual doors to open — but there isn’t, and it can be a lonely place unless you actively start acquiring visitors. Part 5 explores sales and marketing in more detail to ensure you get people clicking on your online store.

B2C retailers may make a little less profit per product than a D2C business (as they are effectively the intermediary), but this is not always the case, and it varies from industry to industry. Some of the largest online retailers in the world are B2C businesses — think Walmart, Target or the Zalora websites across Asia.

B2B: Business to Business sales

Although not the focus of this book, the flexibility of many ecommerce platforms allows for businesses to sell to other businesses — business to business (B2B) sales; in other words, a wholesale distributor can offer products online to retailers to buy, and then on-sell them to individual customers. An example of this may be a manufacturer receiving wholesale orders through a website, or from its stockists or distributors. This method has allowed for sales to be made from the office, with less dependency on travelling salespeople or print catalogues.

Online wholesale sales portals are commonplace these days. Shopify has created an app called Handshake (which can be found in its app store) where retailers can log in and order stock from their wholesale supplier without needing to visit their showroom or meet with a salesperson.

Wholesale trade conducted through online channels allows for a reduction in friction. The buyer can log on at any time and place an order whenever they want, from the comfort of wherever they are. I was recently part of an ecommerce build for a B2C business with 150 stores across Australia, and as part of the scope of its website build, the business constantly repeated the need for its stores to be able to log in to the website and place stock replenishment orders; in fact, the business was more excited about the potential of this service than the opportunity the new website provided for finding new customers across the country who had never seen their stores!

Comparing the different kinds of dropshipping

Dropshipping is perfectly legal, and some retail dropshippers will even inform their customers that the order is being shipped from a third party (it will also be made clear that the paperwork will be from the dropshipper rather than the third party). This more transparent process is known as white hat dropshipping. Black hat dropshipping is when a retailer simply lists products from other suppliers but doesn’t disclose anything about the supply chain to the customer; in fact, the retailer will even leave all the paperwork from the original supplier, which can leave a very bad taste in the customer’s mouth because the customer may feel deceived by the fact that they have purchased from an intermediary when they could have gone directly to the supplier, often at a cheaper price.

I’ve seen black hat dropshipping in action, and it wasn’t pretty. In an omnichannel business I was working with (omnichannel meaning multiple sales channels, in this case online and wholesale — as opposed to pureplay online, meaning online sales only), a wholesale customer was bidding aggressively on our keywords on Google, meaning they were paying to rank higher than us in search results when shoppers were searching for our brand. However, the wholesale customer wasn’t carrying any of our stock — not since its first orders when it became a wholesale customer! We found out that this customer was listing our products online at 30 per cent cheaper than our retail price to gain traffic, advertising this discount in its ads (to entice shoppers to its own website, instead of ours) and then placing wholesale orders with our wholesale department (at a 50 per cent discount!) so that it can pocket the 20 per cent difference. The wholesale customer established a wholesale relationship with us, but then stopped ordering stock at a wholesale level and started dropshipping products without our knowledge!

This is typical black hat dropshipping — and although the customer in this instance got a good deal, they may not be so happy if the next order they purchase in the same way is available cheaper than the price listed on the online store they shopped from. Needless to say, the practice outlined in this example was not sustainable as the retailer was no longer allowed to stock the brand.

If a wholesale account is undercutting the prices of the brand they are selling, the business relationship goes south pretty quickly. Bidding on your suppliers’ keywords and using clickbait (like discounted pricing for a specific brand) in your ads is considered unethical, although not illegal.

An acceptable dropshipment model here would have been for the seller to ask permission to become a dropshipper, as opposed to taking the customer’s money and then placing orders without making it clear to the brand that this is what they were doing.

Here are some of the fair, white hat dropshipping models you may consider trying when you set up your Shopify store:

• Product reselling: The dropshipper sources products from a variety of suppliers and lists them on his or her site for resale. Typically, the website has a theme, such as pet supplies, and the online store focuses on that niche product range while providing value to the customer through offering benefits such as good customer service, excellent product knowledge and fair pricing.

  This model relies on your business being an effective marketing machine — the product is sourced from a third party, so there is little to no product development, and the dropshipper’s goal is to bring in traffic to move the product.

• Business extensions: This occurs when a retail store that doesn’t have an online presence gets a dropshipper to list its products, essentially becoming their digital footprint. When an order is placed, the dropshipper asks the retail store to fulfil the order. This is a useful model for physical retailers who are looking for an online partner because they don’t have the technical ability, or the capital, to start an online branch of their business.
• Product creation: This occurs when a dropshipper bundles items together and the customer orders them as a group, such as supplying the products for a DIY craft project. The dropshipper aims to work with a supplier that has a large range of items that can be bundled together and sold as a group.

• Print on demand: Print on demand is a popular dropshipping business strategy. An example is where a dropshipper sells a product that can have an image or print on it, such as a mug, apron or t-shirt. Every time a sale is made, the dropshipper raises an order with the print on demand supplier, which sends the order out. For this style of dropshipping, you need an arrangement with a print on demand supplier that considers all the product requirements — for this example, you’d need to agree on the image format the supplier can accept to produce the products to an acceptable quality standard, and also agree on the range of products the supplier will print on.

  If you find a niche market, such as ‘we print your pet’s face on a t-shirt’, this dropshipping model can lead to a fun novelty gifting business.

Considering the pros and cons of dropshipping

Dropshipping can be a good way to get started in ecommerce, but remember to weigh up the pros and cons before you rush on in.

Dropshipping on Shopify

I’ve built two dropshipping stores on Shopify, mainly in my early days of using the platform, as a cheap way to get started and work out how to use Shopify. I found the process to be straightforward, and Shopify has some great resources for sourcing products you can dropship and automating the order process.

Oberlo.com is Shopify’s secret weapon when it comes to dropshipping. Oberlo is software that bolts on to your browser. It allows you to access over 30,000 dropshipping products through AliExpress. Rather than having to go one by one through each supplier, asking if they’ll dropship, Oberlo identifies the suppliers who will dropship and allows you to list their products directly on your store, with a click or two of your mouse.

You can find just about anything through Oberlo. As well as listing the identified products on your site, Oberlo automates the ordering and fulfilment process for you. When your online store gets an order, Oberlo raises an order to the supplier of the SKU in your store and places the order automatically, including the delivery address of the customer — asking you only to enter the payment details and select your shipping service.

If you want to go ahead and try Oberlo, you can add it for free to your Shopify website. Just visit apps.shopify.com/oberlo and follow the instructions to add the app to your store — no web developer needed.

As well as providing Oberlo, Shopify also recommends another group of dropshipping sites:

• CJdropshipping.com
• Supplymedirect.com
• Crov.com
• Modalyst.co
• Dropnshop.com

Be sure to check your potential dropshipping partner’s feedback, particularly with regard to shipping times and product quality. You’re placing a lot of trust in your supplier, so choose carefully!