What’s the Best Way to Source Products for Your Subscription Box?

What's the best way to source products for your subscription box? The truth is it depends on where you're at in your business. In this episode, I'm walking you through wholesale, trade shows and markets, manufacturing, and I'm including the key differences between stock manufacturing and custom manufacturing so you can stop second-guessing and start sourcing the right way right now. Come listen.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams.

Welcome back to the Launch Your Box podcast. In today's quick episode, we're diving into sourcing. Whether you're just getting started or scaling to that next level, I'm going to break down 3 sourcing strategies. We're going to talk wholesale. We're going to talk trade shows and markets. We're going to talk manufacturing and different levels of manufacturing. And I'm going to show you how each one fits a different stage in your journey. So let's go ahead and jump in. So let's talk about something every subscription box owner has to figure out. That's what we're talking about today, and it's how to source products. And if you've never bought products before, there's a lot of questions around that. So we need products to go in our subscription boxes and you're questioning, should I buy wholesale? Should I go to the trade show or market? Am I going to manufacture, buy overseas? Like, what do I do in this situation? And the truth is, is that there's no one-size-fits-all answer for this. And the real question isn't which sourcing method is right, it's what makes sense for the stage of business that I'm in right now. So today I'm gonna walk you through, there's 3 ways to source products in this episode. I'm gonna talk about the pros and cons of each of those and I'm gonna show you how they naturally line up with the stage you're at in your business. From our scrappy beginner subscription box owners to someone that's scaling like I am. So let's start at the beginning. So I would call this like stage 1. So if you're in the early stage of your business, maybe you haven't even launched your subscription yet, but you're still working on getting, you know, or you're still working on getting your box together for that first mailout. Or maybe you're still within your first 50 to 100 subscribers. So if that's you, like, this is the phase that you're in, and this is really where wholesale shines, okay? I started here, and most of my Launch Your Box members start here as well because it gives you flexibility, it gives you speed, and there's low risk involved at this stage. And that's wholesale, okay? Let's talk about the pros and cons of buying wholesale. Now let me just clearly define that for you in case you don't know, but buying wholesale means that you're working with a vendor's rep to purchase items that are not retail prices. These are our wholesale prices. So the, the lineup goes to like the manufacturers manufacturing it, they use a broker to distribute it, so they're paying another person, then it gets to the wholesaler. Now they're, they have a cost to it, and that goes to the retailer, us. So we're kind of a few legs in, and the costs increase every time that someone touches that. Okay. But here's the pros of buying wholesale. You have low minimums. You can kind of order what you need, even in small batches. You've heard me say that there's usually a minimum order amount that's a dollar amount. That's really what you need to focus here. Sometimes they're in case packs. It might be 4, 6, 12. But these are low minimums so that you can buy what you need for the amount of subscribers, subscribers that you have. There's also fast turnaround. If I'm buying something from wholesale, there's a good chance it's going to ship in the next couple of days. And most of the time it's domestic, it's stateside. And so those products are going to be delivered quickly. I don't have to worry too much about waiting forever for something that I buy wholesale unless it's not in stock. So you got to make sure that, that, you know, it's in stock. And then really there's— I, it's called— I call it like It's an easy test, right? So you can try new product types without like big commitments of manufacturing. And so I can test something, I can try something new without having to purchase a ton of something. And then when we look at the cons of, of wholesale— so we talked about the pros, we talked about the great things about wholesale— here's what's the flip side. I want to say bad because it's not necessarily bad, it's just the Part of doing business, right? You've got tighter margins, so you're paying more for this product than you would if you went straight to the manufacturer. So you're going to have, um, lower margins when it comes to this product. You also have no exclusivity. Other boxes, other stores can carry the same item that you have in the box, and that's okay. It's part of your experience, but you have no exclusivity, and then you're really limited on branding. So if you foresee that you want to have your brand on item, um, you're using other people's brands, which in turn elevates that brand instead of your own. So I want you to use wholesale to really learn about your audience. It's going to ship quickly. It's going to keep your cash flow manageable because you won't have to purchase months out at a time. But your goal at stage is get the products out the door and grow and scale so that you can use different types of sourcing in the future. But this is not bad. Don't overcomplicate it. This is where we all start, okay? So that is wholesale. Now, stage 2 is where I'm gonna send you to market. So there's trade shows, there's markets, And this is where you're really going to connect with vendors. And, um, this is after you've kind of gotten some traction. Now you can start here. There's a lot of wholesalers at market too, but when you start building this relationship, you're going to have access to things that you wouldn't necessarily when you're just using a wholesale site. So this might be after you've gotten over 100 subscribers, you're ready to kind of dive in and build some relationships. Um, and so I'm going to send you to a market at this stage. Um, and so you're no longer just getting a minimum amount of product to fulfill your minimum subscribers and get it out the door. You're trying to wow your subscribers. And so really the pros of going to markets or trade shows is that you're going to see some vendors that have more unique products. So you'll find handmade, you'll find boutique style, you'll, you'll find mass production there. You'll also find small batch items at market too. The other pro of going to market is that you start building vendor relationships. Face-to-face conversations often lead to more discounts, better pricing, a little exclusivity. So you're starting to build these relationships, and you can start this from day one. But if we're just trying to get our first box out the door, just go Wholesale from the websites, and then let's start building relationships from there. And then also, by going to a trade show or market, you really have a stronger curation because there are thousands of vendors in one place. You can really start to craft a unique box experience by talking and working with all kinds of different vendors. Okay, the cons of markets and trade shows You're going to have travel costs and time. So they are in person, you're going to have to travel, it's going to take time, a couple days a lot of times to go to a market. So there's the trade-off there. Um, not all vendors will cater to small businesses, so some of the vendors will only cater to larger orders. There are a lot of vendors at market that will cater to that person with a starting order of $200, $300, or $500. So you've got that You've got that too. And then a lot of times at market or trade shows, you have longer lead times because a lot of their product is not in stock yet. It's being manufactured. So you'll need to plan boxes in advance. But this stage is all about upleveling your curation. You're moving kind of beyond what's on the shelf at a couple vendors that you shop wholesale, and you're starting to elevate the experience by really curating a box from multiple vendors. Now, stage 3, you're really ready to scale or you're at the scaling point. And so I put manufacturing in here, but it's got two paths. So let's start about— let's start on the first path. And I'm just speaking to you from my own experience. I started with wholesale websites, then I went to trade shows and market, then I started manufacturing overseas. So I did the manufacturing on two different different levels. Option 1 was I was buying stock from manufacturers. So manufacturers overseas have a whole bunch of things that they already have made or already have ready to ship. When you look at it, say on a site like Alibaba, it's going to say ready to ship. These are made, ready to go. That's where I started with manufacturing. And so I wasn't designing the products yet, but I was buying what was already made by a manufacturer. And then sometimes I I could add, you know, my logo card or my branding or my packaging to that. And so that was kind of my first toe dip into manufacturing. And then, you know, for this step, I got lower minimums than fully custom products. So when I do a fully custom product, sometimes my minimums are very high, but this I was able to buy a couple hundred, 500, like I had lower minimums here. This was faster turnaround for me because it was already made, so all it had to do was ship. I could have it in a few weeks depending on how it shipped. If it was light enough to go airship, I could have it in a few weeks. If it had to go on a boat, I would— could expect that to be about 20 or 30 days. It had way better margins than wholesale because we were skipping a couple of those middlemen when I went direct to the factory. And so the cons is that you're kind of limited to what they already have ready to ship, but a lot of times there's a lot to choose from. It's not exclusive, you could find these products really anywhere, but it really required a lot of communication when I first started manufacturing. So this is kind of the perfect next step when you're ready to buy in bulk, you're ready to dip your toes into overseas manufacturing without having to dive headfirst into full product development. And then option 2 would be the full custom manufacturing. This is where you're ready to create your products from scratch, something that's 100% yours. You're working with a manufacturer to design every detail from fabric to buttons to zippers to straps. Like, I'm talking about a bag, but these are fully customizable. And so that's where you get your own look and feel. You have a stronger brand identity because it's exactly what you want. It'll have your label in it. It has a higher perceived value because it's custom, it's exclusive to your box only. And the cons of fully custom manufacturing: there's high minimums. Sometimes it's over 500, sometimes it's 1,000, sometimes it's 1,500. So you're going to often have higher minimum quantities. So you'd really want to dive into this as you scale. There's longer production times. A lot of times it's 3 to 6 months. And there's higher upfront costs. You got to pay more down, um, and then You know, I can typically pay some down and then pay the rest when it ships. Sometimes I have to pay all of it down if it's fully customizable. But this is really for when you're at the scaling, you've got great retention, you've got steady revenue, and you've got a long-term growth plan. And you don't have to do this like at any certain time. Do it when you're ready. Okay, grow into this stage. So You start with wholesale, you grow into going to markets and trade shows, you dabble into stock manufacturing so that you can control your margins a little better, and eventually you may build into custom pieces that define your brand. But you don't have to rush into all of it. Don't compare your stage 1 to my stage 4. I started at stage 1 too, and you need to do what's right for your business right now.