Sourcing your product is probably the most valuable activity in your business and for the most part will determine your success and the profitability.

Most popular ways to source your product are:
1) You create your own product – you have total control over the cost and quality of the product. 
2) You work with a manufacturer who creates the product – you buy an inventory at an attractive wholesale price. The more you buy the better the price you can get. The downside – you have to invest a lot of money in inventory and you assume all the risk if the product doesn’t sell.
3) You work with a supplier who provides you with product pictures and descriptions and you show the products on your website. The supplier will ship the product to you after the customer placed the order. In this case, you don’t need to have a large investment capital but your wholesale price is not as good because you buy in small quantities. So you profit margin is lower in this model. In addition, since others can buy the same product there is a tough pricing competition that further lowers your profit margin.
4) You work with a supplier that provides you with product pictures and descriptions and sends the order to your customer. That is called drop-shipping. You don’t invest money in inventory but the wholesale price in some cases is as high as the retail price. So your profits can be really low or you might not be able to competitively sell. In addition, if you process customer returns instead of the supplier you might end up with a lot of unwanted inventory that you have to pay for.
5) You can work with artists/designers on a consignment basis where they provide you with the item (or item’s picture and description) and the payment is only after the product is sold. You pay more for the product this way but you don’t have to invest money in inventory.

In all cases, the more unique is your product the better is your ability to sell it and make a good profit on it.

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