Editor’s note: This is a guest post by Dani Avitz, COO at Algopix.
If you sell products online, product sourcing is a critical part of your business. How do I figure out what to sell online? is a basic question that every online seller has considered and for good reason – product selection is at the core of eCommerce and the right product selection can make or break your business. Unfortunately, most online sellers are still relying on antiquated processes for selecting the best products for their business.
The story typically goes something like this: You receive multiple price quotes from multiple vendors on a daily, weekly or monthly basis or you reach out to your trusted network of suppliers for their recommendations. Depending on the size of your organization, you may pass it along to an analyst to do some number crunching but more than likely, they either trust the vendor’s recommendations or just make a gut call. You place your order and carry on with your day.
Sound familiar? You’re not alone – in my 10 years working with eCommerce departments, this is the go-to process. Like any gut-feeling decision, sometimes it works out exactly as you planned but sometimes (more often than not), it doesn’t and when it doesn’t, the consequences can have a serious impact on your business.
The three biggest consequences of making the wrong product selection are:
So how can help your business avoid some of these common product sourcing pitfalls? Before you even begin, ask yourself two few very important questions. First, how familiar are you with these products? Secondly, do you know and understand the target audience? These are obvious questions but they will dramatically impact your ability to market, promote, and sell as well as any customer service efforts post-sale.
From there, it’s time to do your homework. If you’re a larger seller, you may have relationships with third party agencies that can help do the heavy lifting for you. eCommerce agencies can be a great extension to your team; they can also prevent you from getting into important detail that could impact your future decision making. You may also have an in-house team that has experience with sourcing, specific marketplaces like Google, eBay or Amazon and is accustomed to working with large Excel files. For many online sellers, they are left to their own devices to look at the data and make a decision. No matter which of the three categories you fall into, here are three important considerations for your research:
There are some great solutions in the market that help online sellers do a lot of this manual work on their own and can be a great tool for both established product sourcing teams or entrepreneurs just getting started.
One Final Thing
Even with all of the right data, even the best online seller will occasionally select a product that doesn’t perform as expected – it’s the nature of business. Don’t get discouraged. Take the opportunity to review your process, understand the data and make improvements moving forward.
Algopix, based in Palo Alto and Tel Aviv, provides comprehensive product sourcing insights for the eCommerce community. Using advanced algorithms, Algopix helps online sellers source and sell with confidence by answering some of the biggest questions facing today’s eCommerce sellers like what product to sell, where to sell it and how to price.