Sourcing Product For An E-Commerce Business

To have a business you need to have some kind of product, whether it is your knowledge something you make, or something you buy and resell. Some of the are options are drop shipping, affiliates, and direct suppliers and wholesalers. Each of these has pros and cons of course.

Affiliate

When you sign up for an affiliate program you basically place an ad for their product on your web site. Users can click on the ad and purchase product or memberships through their company. You don’t have to worry about warehousing, shipping, or anything.

However the profit margin for this type of agreement is pretty low, likely around 4%. Usually you get a certain percent or small set price per sell. This type of revenue model works best when you have some sort of untapped market or niche.

Drop Shipping

Drop shipping is similar in the sense that you don’t have to worry about the warehousing or shipping. You can integrate products on your site as if they were yours, and the company allows you to put your own label on the packaging so they are not confused about getting their product from a different company.

The down part to this model is there is likely a large up front fee for you to be a member of a drop ship program. However you get to set the prices on your site for the items, you just pay the wholesale price.

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