The Guide To Sourcing Goods For Small Businesses

b3c3b1d46a7b1e736619033cdf80c431.jpg

Sourcing goods is essential for every company, no matter how big or in this case small it is. The question is how they can do so and why they would do it. Before we can delve into this, it’s important to understand what exactly ‘sourcing goods’ means and how ‘small businesses’ are defined. Keep reading to find out more!

What is meant by ‘sourcing goods’?

Part of setting up a business is locating a supplier that is willing to provide them with the materials they need. In other words, a business must find a source for their goods.As an example, consider a company that produces electrical appliances. A key component of most electrical appliances is brass, and so the company may search in, say, the Indian city ‘Gujarat' for a brass supplier. Once the company succeeds in doing so, and strikes up a contract with the supplier, the company will be sourcing their brass (their goods) in Gujarat.

How do we define small businesses?

To understand the size of a business, you will need to look at the number of employees that it has. According to Australia’s Fair Work Act in 2009, a small business consists of 15 employees. On the other hand, the European Union categorizes a company with 50 employees as a ‘small business’. Examples of small businesses include a grocer’s shop, bakeries, hairdressers, restaurants, and even small-scaled medical clinics.Now, for a small business, sourcing goods can be especially tricky. They will have limited resources and personnel available for locating a supplier, most of which will prefer signing a contract with larger businesses. This doesn’t mean, however, that it is entirely impossible for them to find a supplier.

How to source goods

Sourcing goods from warehouses to stores

Courtesy: Freepik

If you own a small business, here are a few of the steps you can follow for sourcing goods.

  1. Determine what you need

Pinpoint what goods or items you particularly need. Do you need paper for your printing agency, or perhaps fresh fruit for your restaurant’s kitchens? Determining what it is that you need helps streamline your search, which in turn, helps save time and effort.

  1. Start looking for a supplier

One of the best ways to find a supplier, or retailer, is simply searching for them on the Internet. Just open up a search engine such as Google, and look for suppliers that specialise in what you require. You can also check out websites such as Alibaba or Global Sources, which list suppliers. This method isn’t costly, and as such, helps the small business save money.You may also consider looking for a supplier on social media, as some suppliers tend to advertise themselves on such platforms.

  1. Check out some potential suppliers

Once you’ve found some suppliers you are interested in, you will need to:

  • confirm whether or not they carry the production abilities you require
  • determine whether they are efficient
  • evaluate the quality of their supply

You should also check out their certifications, in order to determine their legal procedures. You may do so by checking out their websites, or by contacting them directly.

  1. Start buying from the supplier

Now that you’ve verified the suppliers, pick one that best suits your requirements. Once this is done, you can start buying goods and items from them. Mind you, there are two methods of buying supplies.

  • Directly purchasing from the supplier

You simply contact your supplier, tell them what it is that you need, and agree on a date of deliver. You can also choose the method of payment, either through credit card, wire transfers, or through a bank letter of credit.

  • Hiring a commission-based sourcing agent

Such an agent doesn’t simply aid in the transaction and payment of supplies, they can also help you find and verify a supplier in the first place. Of course, they take a small cut of the purchase price – around 3 to 10 percentage of the price. However, the agent helps to reduce the amount of effort on your part.

Is there anything else?

We have listed a few of the steps for sourcing goods above. However, you do not have to follow them. There are, of course, alternatives ways that may fit your needs better.Instead of locating a supplier by yourself, you can request the help of a sourcing service provider. Such organisations aid in the entire procedure, by identifying a supplier and determining the cost of payment. They may also aid in the management of supplies and their transportation.You can also set up a deal with a trading company. Trading companies often hold stocks of specialised products, and deliver them to customers in small amounts, which is suitable for a small business.Finding solutions for sourcing goods

Courtesy: GCH Test & Computer Services LTD

So, after all of this effort, why should a business source their goods?

The most obvious reason is the supply of necessary items. After all, most companies and businesses will require certain goods to carry out their services.A second reason is that it can lead to an increase in productivity. Allowing another organisation for sourcing goods, your own staff doesn’t need to worry about the matter, and can focus their efforts on customer service.

In the end...

Just remember, once you’ve found a supplier, your business will still need to provide your customers with the best possible services. If you manage to do so, your small business will flourish, and hopefully grow in no time.