Product sourcing lays the foundation for a successful business and has a significant impact on its success.

Nowadays, there are a lot of ways to source products. But which one should you choose for your business? Well, that’s a little hard to decide.     

To help you make a decision, we’re going to discuss the top 5 product sourcing methods and their pros and cons.  

So without wasting any time, let’s just jump into it. 


Dropshipping is a customer demand fulfillment method in which a seller requests a supplier to deliver orders to the customer.

Here’s how it works.

Suppose you have partnered up with a dropshipping supplier. Your job now is to only collect orders.

Once the order is confirmed, you will forward it to your dropshipping supplier.

The supplier will then package the product and deliver it to the customer on your behalf.

You don’t have to pay the suppliers until the customers pay you. You buy at one price, sell at another, and get to keep the profit in between. 

Pros & Cons 


  • Little To No Cost – Dropshipping is one of the cheapest product sourcing options as you don’t need a space to store your inventory.
  • Little Risk – There’s very little chance of loss as you are not spending a whole lot of money upfront.
  • Easy To Grow – The suppliers are responsible for the orders and inventory management which takes a huge burden off your shoulder. You don’t have to worry about storage, packaging, and other things. Solely focus on getting as many products as possible.


  • Fewer Profits – As the supplier acquires, stores, and delivers the product to the customer, they charge more for single-item purchases. Which means your profit margins shrink. 
  • Dependency – No matter how much you establish yourself or the product, you are dependent on the supplier. The suppliers have complete control over the inventory and if they run out of the product there’s nothing much you can do about it. 
  • Difficult To Stand Out – Dropshipping businesses usually sell unlabeled products as they supply many people. This makes it difficult for your brand to stand out, as many other businesses sourcing through dropshipping sell the same things.


Wholesalers sell goods and products in large quantities, usually to retailers. 

Sourcing from wholesalers is very simple. 

Just visit a brick-and-mortar or online wholesale store to fill up your inventory.

Pros & Cons


  • Less Risk – Wholesalers usually sell in-demand products that are already well-established and trending. Therefore, you’ve less risk of failure when sourcing from a wholesaler instead of making a new product.
  • Easy to Start – It is much cheaper and easier to buy products to sell from wholesalers than to manufacture your own products.
  • Good Profit – You get low costs as you purchase the products in bulk, which results in decent profit margins.


  • Hard To Differentiate – Many other people including your competitors also buy from wholesalers. Thus making it hard to differentiate between your products and theirs.
  • Storage Space – Wholesalers sell items in bulk. You need to have adequate storage space to store these items.
  • Stock Availability – Wholesale products sell fast. If you aren’t fixated on something and need time to make a decision, understand that wholesale goods sell out within days.


Manufacturers create or produce goods and products with the help of equipment, labor, machines, tools, etc.

It’s a very delicate, time-consuming, and expensive process. You’ll have to create designs, prototypes, and run tests before introducing the product to the market.

However, if the product you want to sell is one-of-a-kind or isn’t present in the market, your best option is to get a manufacturer to create one for you. 

Pros & Cons 


  • Low Cost Per Product – Sourcing products from manufacturers means less cost as there are no other parties like wholesalers involved in the process.
  • Create Your Own Brand – Working with manufacturers allows you to create a truly unique product. This is great for brand awareness and makes it way easier to distinguish you from the competitors.
  • Easier To Scale Up – A great advantage of working with manufacturers is that you can easily expand your business. Create more and more new products and raise the bar higher.


  • High Volume – Manufacturers have a high minimum order quantity requirement. So, to work with them you’ll have to spend a lot of money without knowing if the product will succeed.
  • Time-Consuming – The process of creating a product and introducing it to the market can take months or even years. 
  • Difficulties in Management – When you are creating a product yourself, managing everything can become really difficult. Things like shipping, storage, and order management can be a huge drain. Not to mention the big nuisance of clearance and duties, if you are sourcing from overseas.

Wholesale Trade Shows

A wholesale trade show is an event where members of the B2B wholesale industry meet to showcase, demonstrate, and talk about their latest products. 

These events are great for discovering hidden gems in the form of suppliers, as many of them don’t have an online presence. 

Moreover, you can find new private label product manufacturers that can help you build your brand name and presence.

Pros & Cons 


  • Networking – Trade shows are a great way to connect with new suppliers. 
  • Keep Up With Industry Trends – Many business owners in the industry attend trade shows. Due to this, you are likely to see new products, technology, and trends in your industry.
  • Create a Brand Presence – You can generate awareness of your brand by attending these events. 


  • Expensive – Trade shows can be costly. Booth setup, hotel fees, travel expenses, and entrance fees can drain your pocket.   
  • Suppliers Prefer Large Brands – Many suppliers that attend trade fairs are usually there to catch a big fish. Most of them usually have a massive minimum order quantity.
  • Overwhelming – Trade shows can be overwhelming for first-time attendees since they might not know how to maximize their experience.

Handcraft Products

Handmade products are very trendy nowadays.

You can have complete control over quality and branding when you manufacture your own beauty products, clothing, or jewelry.

Pros & Cons 


  • Room For Customization – Handcrafted products allow a lot of room for customization. 
  • Complete Control – You have full control over the quality and process.
  • Originality – It is easy to distinguish yourself from your competitors by making the products yourself.


  • Time-Consuming – Creating these products can take a lot of time.
  • Constant Need To Source – You need to source raw products from time to time to create handcrafted products.
  • Extra Space – You’ll need additional space to make your products.