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Last week, I talked about making your initial inroads into ecommerce. I discussed finding your niche and choosing a product to sell. I discussed purchasing the domain, setting up the site and the business. This week, I will continue with the subject of finding inventory to sell.

Find Manufacturers

This is perhaps the toughest issue of e-commerce. You've decided what you want to sell, but now you need to find out where you're going to get the product to sell. And you have to think about issues such as price, supplier dependability and shipping. Simply put, the internet has thousands of companies which manufacturer product and will sell you inventory. Likewise, any manufacturer is going to have a sales department to sell their product to retailers. So, what you need to do is go out and find these companies.

Let's assume, first, that you have a particular product or product line that you wish to sell. OK, who makes it? Great, get that company's contact information and get in touch with them. Get information on pricing and how the retail channel works. If you have a direct line with the manufacturer, you can often do fairly well with e-commerce. One thing you can do, too, to make your job easy is to find manufacturers of products which do not already have sellers online. Perhaps this company only sells through small brick-and-mortar stores and are not yet educated in the benefits of e-commerce. Well, you can educate them and promote yourself to them as their e-commerce channel. You make a deal with the company to give you a good rate on inventory, which then gives you wiggle room to ask adequate retail price to make a profit.

Sometimes finding a deal like this will involve contacts in your local area. Perhaps you have an "in" with a company locally which is in a business you are interested in. Get in touch with the owner or suitable contact in that business and pitch your idea to them. Private deals like this with a local supplier are often the best for e-commerce sites.

Drop-Shipping

Alternatively, you may not have a clue who to contact for inventory, or the products you wish to carry have so many different manufacturers that it's not very practical to contact them all. You may also not want to have the hassle of maintaining inventory and/or shipping. Many upstart ecommerce sites who stock their own inventory end up stocking it in their house or in a warehouse. And shipping will require labor and time. An option for you is to locate dropshippers.

A drop-shipper is a company which will sell you inventory on a per-order basis and ship orders directly to your customer on your behalf. That means that your customer gets their order, but it is shipped from the drop-shipper's warehouse with your return address on it. Of course, you pay for this service, but it removes the hassle. You will still need to handle customer support and communication, but you will not need to stock the inventory or make daily trips to the post office. Finding drop-shippers entails internet research. Sometimes you will find them directly in your search results, but many times you will find directories of drop-shippers. Many sites charge for access to such directories. Here are a few sources you can go to look around:

• WholeSale Central. This site has a database of wholesale sellers. They also have a section of their database dedicated to dropshippers, which you can find here.
• Worldwide Brands. This site is home to the Drop Ship Source Directory. They have a pretty good reputation.
• Inventory Source.
• Ultimate E-Marketing & Dropshippers. I put this here simply as an example of a site which charges for information. You find this a lot in this field and it is the system at work. E-commerce is a business, and there is money to be made, too, in showing people how to do it and providing information. I can't vouch for this product, as I've never tried it.

One thing to keep in mind is that most drop-shippers do not manufacturer their own products but are instead making their own deals with manufacturers. So, in essence, it is a middle man. Obviously, if you went to the manufacturer directly, your profit margin would be higher. So, it is a tradeoff. Drop-shipping or buying from a wholesaler is more convenient because they can take some legwork out of your new venture, but you will pay more for it. This is commerce, and just like in the real world, everybody on the chain is out to make money. Oftentimes, the final leg of the chain (the guy dealing with the customers directly), is paying already for several links in the supply chain before him/her.

Scams

Everybody in this field is out to make money, and in any field like this, you will have scammers. This field, in particular, is ripe for it because e-commerce brings the ability to sell goods to almost anybody via the internet, right into their homes. With that kind of business now open to anyone, you now have a larger pool of people who have little-no business skills. That means they are gullible.

Now, one of the things you will find is that some drop-shippers are not really legit drop-shippers. Any legit dropshipper really should have their own warehouse and actually stock items themselves. If they do not, then they are nothing but a middleman and serve no other function than to make prices higher. Some post nice websites which claim they have a warehouse, but they don't. Its best to look into these guys first and see what you can find. As nice as their website may be or ad great as they say they are, if they do not have a warehouse and are not stocking their own inventory, then they are just a middleman. Like you, they are buying low and selling high. There is nothing illegal about it. They're in business just like you. However, they will sometimes put up a false front to make it seem as if they are not a middleman. Besides, for you to make the most profit from a sale, you need to buy from as close to the source (if not THE source) of the product as possible.

Be Realistic

The world of e-commerce is one which many will make out to be glamorous, a pathway to easy money, working 4 hours per week out of the comfort of your home in your pajamas. Most of us have seen the infomercials. Don't subscribe to any of these "magical" systems of making money. Any company who claims they will set up a store for you and supply you the inventory is a sham. They're just using you in the same way as Amway used soccer moms. And any "supplier" who seeks to charge you a monthly fee is not a real supplier.

E-Commerce is not a pathway to magic wealth. Yes, you can make good money at it. You combine some technical know-how with a good (preferably manufacturer) source for inventory and good internet marketing, and you can do well in e-commerce. But, it is work and it is a real business subject to the same rules as any other store. Just because it is based on the internet does not mean you're going to just see checks being deposited in your bank account without working much.

In conclusion...

Finding inventory to sell is perhaps the most daunting aspect of getting into e-commerce. But, once you get that licked and your inventory set up in your new store, it is time to launch. So, we'll talk about that next week.